Statement of retained earnings Hayes Enterprises began 2015 with a retained earn

Question

Statement of retained earnings Hayes Enterprises began 2015 with a retained earnings balance of $920,000 During 2015, the firm eaned $375,000 after taxes. From this amount preferred stockholders were paid $80,000 in dividends. At year-end 2015, the firm's retained eamings totaled $1,210,000. The firm had 133,000 shares of common stock outstanding during 2015. a. Prepare a statement of retained eamings for the year ended December 31, 2015, for Hayes Enterprises. (Note: Be sure to calculate and indude the amount of cash dividends paid in 2015.) b. Calculate the firm's 2015 earnings per share (EPS) c. How large a per-share cash dividend did the firm pay on common stock during 2015? a. Complete the statement of retained earnings for the year ended December 31, 2015, for Hayes Enterprises below. (Round to the nearest dollar) Hayes Enterprises Statement of Retained Earnings for the Year Ended December 31, 2015 Retained earmings balance (January 1, 2015) s Plus Net profits after taxes (for 2015) Less: Cash dividends (paid during 2015) Preferred stock Common stock Retained earnings (December 31, 2015)s b. The firm's 2015 earnings per share (EPS) s SRound to the nearest cent)

Explanation / Answer

Solution:- a) Hayes Enterprises Statement of Retained earnings for the year ended December 31,2015 Particulars Amount in "$" Retained earning balance (January 1, 2015 ) $920,000 Plus:-Net profits after taxes (for 2015) $375,000 Less: Cash dividends (paid during 2015) Preferred stock $80,000 Common stock (Note1) $5,000 Retained earning balance (December 31, 2015 ) $1,210,000 Note1:- The dividend for common stock = 920,000+375,000-80,000-1,210,000=$ 5000 b) Firms EPS= Earning for common stock / Number of common stock EPS= (375,000-80,000)/133,000 EPS=$2.22 Hence the EPS of the firm is $2.22 c) Per share dividend= Total dividend pad/ Number of shares Per share dividend= 5,000/133,000 Per share dividend=$ 0.0376 i.e $0.04 Hence the per share dividend= $0.04 Please feel free to ask if you have any query in the comment section .

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