Income Statement and Statement of Financial Position for Companies
The profit after tax can be either:
(1) distributed to shareholders as dividends or
(2) retained in the companies for future growth as retained earnings or retained profits
(2) retained in the companies for future growth as retained earnings or retained profits
In this case, we can see that even though the profit after tax was $53 550, only $48 550 is shown as retained earnings.
The difference has probably been paid out as a dividend. i.e. shareholders have been paid a total of $5000.
The difference has probably been paid out as a dividend. i.e. shareholders have been paid a total of $5000.
