# The ABC company had an interest expense of \$4,406, and a tax rate of 37%. The company paid\$2,399 as dividends. If the retained earnings is 2006 were \$51,337, what are the retained earnings in 2007?

Which 2007 retained earnings are available?

You can calculate retained earnings 2007 by subtracting total expenses from total income. Next, you will add dividends or other income and lastly subtract taxes. First, subtract \$93,054 from the total sales. Next add all associated expenses. This gives us a net income of \$52,063.

The next step is to include any additional sources of income, which was in this instance \$2,399 dividends. The sum is now \$54,462. Final, taxes are to be considered at 37%. This results in a deduction amounting to \$20,113. The final number for retained earnings is \$34,349

Overall, the retained earnings for ABC in 2007 would amount to \$34,349 (\$51 337 + 2 399 – 20 113) once all relevant factors are considered. The number includes both funds from operations and any possible investments made in the past. It also accounts for tax deductions or dividend payments.