Question

The year-end 2009 balance sheet for Tom's Copy, Inc. lists common stock ($1.00 par value) of $ 5,870 , capital surplus of $ 17,290 and retained earnings of $ 47,076 . On the 2010 year-end balance sheet, retained earnings are listed as $ 50,350 . The firm's net income in 2010 was $ 9,811 . No stock was issued or repurchased in 2010. What were dividends per share paid by the firm in 2010

Answer 1

$1.11 per share

Step-by-step explanation:

For computing the dividend per share first we have to determine the dividend by applying the following formula

Amount of dividend = Beginning balance of retained earnings + Net Income - Ending balance of retained earnings

= $47,076 + $9,811 - $50,350

= $6,537

And, the number of shares is

= $5,870 ÷ $1 par

= 5,870 shares

So, the Dividend per share is

= Dividend ÷ number of shares

= $6,537 ÷ 5,870 shares

= $1.11 per share