Question
Could you please tell me which answer is correct and please explain why it is the correct answer? My quiz marked the correct answer for
Could you please tell me which answer is correct and please explain why it is the correct answer? My quiz marked the correct answer for the following question as "e" (dividends could have been paid in 2010, but they would have had to equal the earnings for the year. The expert answer says "b" though(the company must have had zero net income in 2010... Here is the question: On its 2010 balance sheet, Barngrover Books showed $510 million of retained earnings, and exactly that same amount was shown the following year. Assuming that no earnings restatements were issued, which of the following statements is CORRECT? a. If the company lost money in 2010, they must have paid dividends. b. The company must have had zero net income in 2010. c. The company must have paid out half of its earnings as dividends. d. The company must have paid no dividends in 2010. e. Dividends could have been paid in 2010, but they would have had to equal the earnings for the year.
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