A company has net income of $170,000 and 40,000 shares of stock outstanding. If the company paid a dividend of $1.32 per share, what was the addition to retained earnings?

Question

Quizplus · Accepted Answer

The total amount paid in dividends is:

$1.32 x 40,000 = $52,800

To find the addition to retained earnings, we need to subtract the dividends from the net income:

$170,000 - $52,800 = $117,200

Therefore, the correct answer is D) $117,200.

A Company Has Net Income of $170,000 and 40,000 Shares