The J&W Corporation’s shareholders’ equity as at December 31, 20x7 is as follows

Question

The J&W Corporation’s shareholders’ equity as at December 31, 20x7 is as follows:

Common shares, 1209 shares outstanding

$40000

Preferred shares, $5.34, cumulative, 186 shares outstanding

$15000

Retained Earnings

$57020

The preferred share dividends were last paid on December 31, 20x4. It is now December 1, 20x8 and management wants to pay a dividend of $3.91 per common share.

The company’s 20x8 ending Retained Earnings balance is $75253, and there were no transactions relating to the issuance or redemption of common shares throughout the year.

What was the company’s net income for the year 20x8?

Common shares, 1209 shares outstanding

$40000

Preferred shares, $5.34, cumulative, 186 shares outstanding

$15000

Retained Earnings

$57020

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Paticulars Amount Beginning Retained earnings                57,020.00 less preference dividend = 186*5.34*4                  3,972.96 Less common Dividend = 3.91*1209                  4,727.19 Ending retained earnings before net income                48,319.85 Ending retained earnings after net income                75,253.00 Net income                26,933.15

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