The board of directors decided to pay 50 percentof the firm’s $460,000 earnings in dividendsto the stockholders. The firm has retainedearnings of $680,000 on the books. After thedividends are paid, which of the followingstatements is true about the firm’s retainedearnings account?a. The new value of the firm’s retained earningsis $910,000.b. The new value of the firm’s retained earningsis $450,000.c. The firm failed to reach its profit goal.d. Each shareholder will receive more than he orshe received last year.e. The firm’s retained earnings are too high.
The board of directors decided to pay 50 percentof the firm’s $460,000 earnings in dividendsto the stockholders. The firm has retainedearnings of $680,000 on the books. After thedividends are paid, which of the followingstatements is true about the firm’s retainedearnings account?a. The new value of the firm’s retained earningsis $910,000.b. The new value of the firm’s retained earningsis $450,000.c. The firm failed to reach its profit goal.d. Each shareholder will receive more than he orshe received last year.e. The firm’s retained earnings are too high.
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 68IIP
Related questions
Question
The board of directors decided to pay 50 percent
of the firm’s $460,000 earnings in dividends
to the stockholders. The firm has
earnings
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 receive more than he or
she received last year.
e. The firm’s retained earnings are too high.
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