Cash dividends and two classes of share.
Raymond Limited has two classes of share outstanding: 25,000 5%, $100 par value non-cumulative preference share and 30,000 $10 par value ordinary shares. The company had a deficit (negative balance in retained earnings) of $160,000 at the beginning of the current year, and preference dividends were three years in arrears. During the current year, the company earned profit of $970,000. What will be the balance in the Retained Earnings account at the end of the current year if the company takes all the actions necessary to pay a dividend of $2.50 per share on the ordinary share? $_______________

Question

Quizplus · Accepted Answer

The Answer of Cash dividends and two classes of share.
Raymond Limited has two classes of share outstanding: 25,000 5%, $100 par value non-cumulative preference share and 30,000 $10 par value ordinary shares. The company had a deficit (negative balance in retained earnings) of $160,000 at the beginning of the current year, and preference dividends were three years in arrears. During the current year, the company earned profit of $970,000. What will be the balance in the Retained Earnings account at the end of the current year if the company takes all the actions necessary to pay a dividend of $2.50 per share on the ordinary share? $_______________

Cash Dividends and Two Classes of Share