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Common stock dividends and retained earnings

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Philagen Inc., ended 2012 with net profit before taxes of $211,000.00. The company is subject to a 40% tax rate and must pay $30, 600.00 in preferred stock dividends before distributing any earning on the $80,000.00 shares of common stock currently outstanding.

If the firm paid common stock dividend of .82 per share, how many dollars would go to retained earnings?

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Solution Summary

The solution computes Common stock dividends and retained earnings with the given data.

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Total dividend paid = 0.82*80000 = $65,600

Then,

Addition ...

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