1-

Based on the Income Statement below:

Bengaluru Services Corp. Income Statement

Year Ended December 31, 2019

Revenue:
Fees Earned	$263,000
Less Expenses:
Wages	127,000
Rent	11,000
Utilities	7,000
Insurance	5,000
Depreciation	1,200
Miscellaneous	1,550
Income Before Taxes	128,750
Less Taxes @21%	27,038
Net Income	$101,712

If Bengaluru Services Corp. paid $50,000 in dividends for 2019, what amount would Retained Earnings increase on the balance sheet by? (Hint: Retained Earnings is the portion of Net Income put back into the business and not paid out to shareholders as dividends.)

Group of answer choices

$28,287

$51,712

$10,712

$18,287

2-

If a business's Debt to Equity ratio is decreasing from one year to the next, it shows the business is using lower financial leverage.

Group of answer choices

True

False