Question

Statement of retained earnings Hayes Enterprises began 2015 with a retained earnings balance of ​$928,000. During​ 2015, the firm earned ​$377,000 after taxes. From this​ amount, preferred stockholders were paid ​$47,000 in dividends. At​ year-end 2015, the​ firm's retained earnings totaled ​$1,048,000. The firm had 140,000 shares of common stock outstanding during 2015. a. Prepare a statement of retained earnings for the year ended December​ 31, 2015, for Hayes Enterprises.​ (Note: Be sure to calculate and include 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?

Answer 1

Answer and Explanation:

The preparation and computation are shown below:

Hayes Enterprises

Statement of Retained Earnings December 31, 2015

Particulars Amount $ Amount $

beginning Balance 928,000

Add:

Earning during

the year 377,000

1,305,000

Less: Dividend

paid to

Preferred Stockholders 47,000 1,258,000

Less: Dividend

paid on

common Stock 210,000

Closing balance 1,048,000

b) Earning per share is

= Earning ÷ No. of Common Stock

= ($377000 - $47000) ÷ 140000

= $2.36 per share

And,

c) Cash dividend per share is

= $210,000 ÷ 140,000

= $1.50