Retained earnings using the percent of sales method

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Reference no: EM13850720

Ribbon Industries reported sales of $3 million and net income of $400,000 for 2010. The retained earnings balance at the end of 2012 is $7 million. Ribbon Industries has a dividend payout ratio of 30%. If sales are expected to increase by 25% next year, what will be the projected balance in retained earnings using the percent of sales method?

a. $7,350,000

b. $8,750,000

c. $6,720,000

d. $7,280,000

Reference no: EM13850720

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