Company ended 06 w/ a net profit before taxes $218,000. Subject to 40% tax rate and must pay $32,000 in preferred stock dividends before earnings on the 85,000 shares of common stock outstanding. If the firm paid common stock dividends of $0.80 per share, how many dollars would go to retained earnings. I need to see the work otherwise, I will never figure out how to do this in the future.
2007-09-23 13:15:26 · 3 answers · asked by nascargryl 2 in Business & Finance ➔ Other - Business & Finance
Dividends are paid only after taxes have been paid.
Profit before tax $218,000
Tax at 40% ($87,200)
Profit after tax $130,800
Less:
Preferred stock dividend ($32,000)
Common stock dividend ($68,000) - 85,000 shares x $0.80
Bal. to go to Retained Earnings $30,800
2007-09-23 17:54:00 · answer #1 · answered by Sandy 7 · 0⤊ 0⤋
1
2016-12-23 22:31:07 · answer #2 · answered by Anonymous · 0⤊ 0⤋
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2016-05-17 06:49:10 · answer #3 · answered by ? 3 · 0⤊ 0⤋