Earned Capital and Dividends Below is the stockholders' equity section of the balance sheet of Craft Corporation (with certain details omitted):Stockholders’ equity: 6% preferred stock, $100 par, 10,000 shares authorized and ? shares issued $800,000 Common Stock, $25 par, 50,000 shares authorized, ? shares issued 625,000 Additional paid-in capital: Preferred stock 150,000 Common stock 225,000 Total paid-in capital $1,800,000 Retained earnings 950,000 Total stockholders’ equity ……………………………… $2,750,000 The balance in retained earnings at the beginning of the current year was $675,000, and there were no dividends in arrears. Net income for the current year was $350,000. Based on this information, what is the amount of the dividends declared on each share of common stock during the current year? Select one:a. $2.27b. $4.46c. $1.08d. $3.00

Introduction: Dividends: Dividends are given to share holders of the company. Its a return on their…

Answered: Below is the stockholders' equity…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter11: Stockholders' Equity

Section: Chapter Questions

Problem 11.13AMCP

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Earned Capital and Dividends

Below is the stockholders' equity section of the balance sheet of Craft Corporation (with certain details omitted):

Stockholders’ equity:
6% preferred stock, $100 par, 10,000 shares authorized and ? shares issued	$800,000
Common Stock, $25 par, 50,000 shares authorized, ? shares issued	625,000
Additional paid-in capital:
Preferred stock	150,000
Common stock	225,000
Total paid-in capital	$1,800,000
Retained earnings	950,000
Total stockholders’ equity ………………………………	$2,750,000

The balance in retained earnings at the beginning of the current year was $675,000, and there were no dividends in arrears. Net income for the current year was $350,000. Based on this information, what is the amount of the dividends declared on each share of common stock during the current year?

Select one:

a. $2.27

b. $4.46

c. $1.08

d. $3.00

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