2.? Earnings available to common stockholders are defined as net profits Questio

ID: 2651356 • Letter: 2

Question

2.? Earnings available to common stockholders are defined as net profits

Question 3

3.? Retained earnings on the balance sheet represent

d.? none of the above

Question 4

4.? The primary concern of creditors when assessing the strength of a firm is that firm's

Question 5

5.? A company reports a retained earnings balance of $3,000 for 2009.? In 2008 the balance was $2,500.?

Between those years they paid $100 in preferrred stock dividends and $200 in common dividends.?

Given that information, what must have been their net income for 2009

2.? Earnings available to common stockholders are defined as net profits

Question 5

A company reports a retained earnings balance of $3,000 for 2009. In 2008 the balance was $2,500.

Between those years they paid $100 in preferrred stock dividends and $200 in common dividends.

Given that information, what must have been their net income for 2009

Answer

Addition to Retained Earning = Ending Retained Earning - Beginning Retained Earning

Addition to Retained Earning = 3000 - 2500

Addition to Retained Earning = $500

Net income for 2009 = Addition to Retained Earning + Preferred Stock Dividend + Common Stock Dividend

Net income for 2009 = 500 +100 + 200

Net income for 2009 = $ 800

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