Explore BrainMass

Explore BrainMass

    If retained earnings remain constant, what does this say about net income and dividends?

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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?

    A. The company must have had net income equal to zero in 2000.
    B. The company did not pay a dividend in 2000.
    C. If the company's net income in 2000 was $200 million, dividends paid must have also equaled $200 million.
    D. If the company lost money in 2000, they must have paid a dividend.
    E. None of the statements above is correct.

    © BrainMass Inc. brainmass.com March 4, 2021, 6:05 pm ad1c9bdddf

    Solution Summary

    This solution briefly describes the balance of retained earnings.