On December 31, 2017, Pilozzi Company has the following information available: C

Question

On December 31, 2017, Pilozzi Company has the following information available: Common Stock Additional Paid-n Capital Retained Eamings Cash $5 million $4 million $4 million $4 million Investment in Trading Securities$50,000 On December 31,2017, can the Board of Directors declare a cash dividend of $5 million? O A Yes, if they can borrow some money, or liquidate some assets No, the cash balance is below $5 million. Retained Earmings is below $5 million. Cash and Retained Eamings are both below $5 million.

Explanation / Answer

Retained earnings is less than cash dividend declared so we can not declare 5 million cash dividend

SO answer is c) No, retained earnings is below $5 million

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