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4 September, 12:28

Statement of retained earnings Hayes Enterprises began 2019 with a retained earnings balance of $ 928 comma 000. During 2019 , the firm earned $ 377 comma 000 after taxes. From this amount, preferred stockholders were paid $ 47 comma 000 in dividends. At year-end 2019 , the firm's retained earnings totaled $ 1 comma 048 comma 000. The firm had 140 comma 000 shares of common stock outstanding during 2019. a. Prepare a statement of retained earnings for the year ended December 31, 2019 , for Hayes Enterprises. (Note: Be sure to calculate and include the amount of cash dividends paid in 2019 .) b. Calculate the firm's 2019 earnings per share (EPS). c. How large a per-share cash dividend did the firm pay on common stock during 2019 ?

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  1. 4 September, 12:34
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    a. The preparation of the statement of retained earnings for the year ended December 31, 2019 is presented below:

    Hayes Enterprises

    Statement of retained earnings

    For the year ended December 31, 2019

    Beginning balance of retained earning $928,000

    Add: Net income $377,000

    Less: Cash Dividend paid

    Preference stock dividend - $47,000

    Common stock dividend $210,000

    Ending balance of retained earning $1,048,000

    The common stock dividend is

    = $928,000 + $377,000 - $47,000 - $1,048,000

    = $210,000

    b. The earning per share is

    Earning Per share = (Net income - Preferred Dividends) : (Average Common shares outstanding)

    = ($377,000 - $47,000) : (140,000 Shares)

    = $2.36 per share

    C. Dividend per share = Common Stock dividend : Common Shares outstanding

    = $210,000 : 140,000 shares

    = $1.50
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