The board of directors decided to pay 50 percent of the $460,000 earnings in dividends to the
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The board of directors decided to pay 50 percent of the $460,000 earnings in dividends to the stockholders. The firm has retained earnings of $680,000 on the books. After the dividends are paid, which of the following statements is true about the firm’s retained earnings account?
a. The new value of the firm’s retained earnings is $910,000.
b. The new value of the firm’s retained earnings is $450,000.
c. The firm failed to reach its profit goal.
d. Each shareholder will received more than he or she received last year.
e. The firm’s retained earnings are too high.
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Related Book For
Foundations Of Business
ISBN: 9780538744515
2nd Edition
Authors: William M. Pride, Robert J. Hughes, Jack R. Kapoor
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