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    Statement is true about retained earnings

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    On its 1999 balance sheet, Sherman Books showed a balance of retained earnings equal to $510 million. On its 2000 balance sheet, the balance of retained earnings was also equal to $510 million. Which of the following statements is most correct? Show your calculations.

    a. The company must have had net income equal to zero in 2000.
    b. The company had a profit in 2000 but did not pay a dividend in 2000.
    c. the company's net income in 2000 was $200 million.
    d. If the company lost money in 2000, they must have paid a dividend.
    e. None of the statements above is correct.

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    Solution Preview

    The most correct alternative will be a.

    If the retained earnings are the same, this ...

    Solution Summary

    The solution explains the correct alternative from the given options relating to retained earnings