ZuoTi.Pro
Question

XYZ Company has a net loss of $100,000 for the year and pays its shareholders a...

XYZ Company has a net loss of $100,000 for the year and pays its shareholders a dividend of $20,000. How will this impact retained earnings?

A.

Retained earnings will increase by $120,000.
B.

Retained earnings will increase by $80,000.
C.

Retained earnings will increase by $20,000.
D.

Retained earnings will decrease by $120,000.
E.

Retained earnings will not change.
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Change in retained earnings: = Net income/(Loss)-Dividends paid = -$100,000-$20,000 = -$120,000 Hence, correct option is D. R

0 0
Add a comment
Know the answer?
Add Answer to:
XYZ Company has a net loss of $100,000 for the year and pays its shareholders a...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • XYZ Corporation distributed to its shareholders a total of $30,000 in cash plus property that had...

    XYZ Corporation distributed to its shareholders a total of $30,000 in cash plus property that had a fair market value of $80,000 and a basis of $60,000. The corporation’s earnings and profits were $100,000 on the last day of the year in which the distribution was made after taking into effect the impact on the corporation’s earning and profits of the gain recognized on the distribution (but before reducing earnings and profits by the fair market value of the distribution)....

  • Question 3: 1. Johnson Inc began operations in 20X6. In that year, the company earned net...

    Question 3: 1. Johnson Inc began operations in 20X6. In that year, the company earned net income of S145,000 and paid dividends of $1.25 per share on each of its 30,000 outstanding common shares. Calculate retained earnings at the end of 20X6 Continue with Johnson Inc. from #1. In the following year, Johnson incurred a loss of $127,000 and paid no dividends. Calculate retained eanings or deficit at the end of 20X7 2. 3. Blaine Corporation had $200,000 in retained...

  • Security valuation: equity: Next year, a company expects net income of $44 million. It pays 50%...

    Security valuation: equity: Next year, a company expects net income of $44 million. It pays 50% of its earnings out in dividends and has a cost of equity capital of 11%. a. If the company's NI has a 7% growth rate, what is the estimated value of your company? b. What is its re-investment rate (i.e. internal rate of return on earnings retained and reinvested)? Now suppose instead that the company's re-investment rate (i.e. internal rate of return) on all...

  • Selected data for Kris Corporation’s comparative balance sheets for Year 1 and Year 2 are as...

    Selected data for Kris Corporation’s comparative balance sheets for Year 1 and Year 2 are as follows: Year 1 Year 2 Assets Cash $ 100,000 $ (50,000) Accounts receivable (net) 50,000 100,000 Inventory 100,000 250,000 Equipment (net) 300,000 350,000 Total assets $ 550,000 $ 650,000 Liabilities and Equity Accounts payable $ 150,000 100,000 Income taxes payable 80,000 30,000 Bonds payable 100,000 80,000 Common stock 100,000 200,000 Retained earnings 120,000 240,000 Total liabilities and Equity $ 550,000 $ 650,000 1. The...

  • Selected data for Kris Corporation’s comparative balance sheets for Year 1 and Year 2 are as...

    Selected data for Kris Corporation’s comparative balance sheets for Year 1 and Year 2 are as follows: Year 1 Year 2 Assets Cash $ 100,000 $ (50,000) Accounts receivable (net) 50,000 100,000 Inventory 100,000 250,000 Equipment (net) 300,000 350,000 Total assets $ 550,000 $ 650,000 Liabilities and Equity Accounts payable $ 150,000 100,000 Income taxes payable 80,000 30,000 Bonds payable 100,000 80,000 Common stock 100,000 200,000 Retained earnings 120,000 240,000 Total liabilities and Equity $ 550,000 $ 650,000 The change...

  • 1) When a company pays out more dividends to shareholders in any particular year: A) Shareholders'...

    1) When a company pays out more dividends to shareholders in any particular year: A) Shareholders' equity must decrease B) Long term debts must increase C) Long term assets must decrease D) Short term debts must increase 2) Which one of the following will increase the net working capital of a firm? A) Making a payment on a long-term debt B) Obtaining a 3-year loan to purchase inventory C) Collecting payment from a customer

  • ABC Inc. owns 75% of XYZ Co. The subsidiary company declares and pays a cash dividend....

    ABC Inc. owns 75% of XYZ Co. The subsidiary company declares and pays a cash dividend. What effect does the dividend have on the retained earnings and noncontrolling interest balances on the parent company's consolidated balance sheet? a. Decreases both the consolidated retained earnings and the noncontrolling interest balances. b. No effect on either retained earnings or noncontrolling interest. c. No effect on consolidated retained earnings, but decreases noncontrolling interest. d. Decreases retained earnings, but no impact on noncontrolling interest.

  • XYZ company has the following: –Stock market price, December 31, 2018: $80 –Common stock ($5 par):...

    XYZ company has the following: –Stock market price, December 31, 2018: $80 –Common stock ($5 par): $3,000,000 –Net Income for year 2018: $1,700,000 –Retained Earnings January 1, 2018: $1,900,000 If on December 31, 2018, the company wants to pay the maximum amount it can in dividends to its shareholders, what is the dividend yield ratio? Select one: a. 7.5% b. 4% c. 3.5% d. 6%

  • Princess Company has the following shareholders' equity on its balance sheet: Shareholders' Equity Preferred shares, $9...

    Princess Company has the following shareholders' equity on its balance sheet: Shareholders' Equity Preferred shares, $9 cumulative, 4,000 issued and outstanding Common shares, 50,000 issued and outstanding Retained earnings Total shareholders' equity 4. $400,000 2,600,000 460,000 3,460,000 a. Calculate the total annual preferred dividend entitlement b. Calculate the total amount of contributed capital. c. If the company paid total dividends of S120,000 in the year, and there were no preferred dividends owing from past years, how much did the common...

  • Selected data for Kris Corporation’s comparative balance sheets for Year 1 and Year 2 are as...

    Selected data for Kris Corporation’s comparative balance sheets for Year 1 and Year 2 are as follows: Year 1 Year 2 Assets Cash $ 100,000 $ (50,000) Accounts receivable (net) 50,000 100,000 Inventory 100,000 250,000 Equipment (net) 300,000 350,000 Total assets $ 550,000 $ 650,000 Liabilities and Equity Accounts payable $ 150,000 100,000 Income taxes payable 80,000 30,000 Bonds payable 100,000 80,000 Common stock 100,000 200,000 Retained earnings 120,000 240,000 Total liabilities and Equity $ 550,000 $ 650,000 The change...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT