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Question 11 (4 points) Saved In its recent income statement, Smith Software Inc. reported paying $5 million in dividends to common shareholders, and in its year-end balance sheet, Smith reported $340 million of retained earnings. The previous year, its balance showed $338 million of retained earnings. What was the firms net income during the most recent year? (Answers are in $millions.) $7.00 $2.00 $5.00 $0.00 $14.00In its recent income statement, Smith Software Inc. reported $15 million of net income, and in its year-end balance sheet, Smith reported $426 million of retained earnings. The previous year, its balance sheet showed $414 million of retained earnings. What were the total dividends paid to shareholders during the most recent year? (Answers are in $ millions.) $3.00 $12.00 $15.00 $1.00 $22.00

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Answer #1

Ans :

(i) Net Income = Ending retained earning - Beginning retained earning + Dividend paid to share holders

Ending retained earning = $ 340 million

- Beginning retained earning = $ 338 million

+ Dividend paid to share holders = $ 5 million

Net Income = $ 7 million

Option A : $ 7

(ii) Total Dividend paid to shareholders during the year = Beginning retained earning - Ending retained earning + Net income

= $ 414 million - $ 426 million + $ 15 million

= $ 3 million

Option A - $ 3 million.

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