Question
Tootsie Roll Industries reported the following in its Consolidated Statement of Retained Earnings: (all amounts in thousands of dollars) 2016 2015 2014 2013 2012 2011
Tootsie Roll Industries reported the following in its Consolidated Statement of Retained Earnings:
| (all amounts in thousands of dollars) | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 |
| Retained Earnings, at the beginning of year | $52,349 | $64,927 | $73,109 | $80,210 | $114,269 | $135,866 | $147,687 |
| Net Earnings | 67,510 | 66,089 | 63,298 | 60,849 | 52,004 | 43,938 | 53,063 |
| Cash Dividends | (22,209) | (21,308) | (19,199) | (18,922) | (47,729) | (18,360) | (18,078) |
| Stock Dividends | (53,817) | (57,359) | (52,281) | (49,028) | (38,334) | (47,175) | (46,806) |
| Retained Earnings at the end of the year | $43,833 | $52,349 | $64,927 | $73,109 | $80,210 | $114,269 | $135,866 |
Although the company reported a steady net income for the years 2010-2016, its retained earnings has steadily decreased ($135,866 thousands on December 31,2010 to $43,833 thousands on December 31,2016). This happened because the company paid in cash and stock dividends more than it generated in net income. What would be a possible explanation of this phenomenon?
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Accounting And Auditing Research Tools And Strategies
Authors: Thomas Weirich, Thomas C. Pearson, Alan Reinstein
6th Edition
032430224X, 9780324302240
