On its 2009 balance sheet, ABC company showed a balance of retained earnings equ
ID: 2659959 • Letter: O
Question
On its 2009 balance sheet, ABC company showed a balance of retained earnings equal to $510 million. On its 2010 balance sheet, the balance of retained earnings was also equal to $510 million. Which of the following statements is most correct?
The company must have had net income equal to zero in 2010.
The company did not pay a dividend in 2010.
If the company's net income in 2010 was $200 million, dividends paid must have also equaled $200 million
If the company lost money in 2010, they must have paid some dividend.
1)The company must have had net income equal to zero in 2010.
2)The company did not pay a dividend in 2010.
3)If the company's net income in 2010 was $200 million, dividends paid must have also equaled $200 million
4)If the company lost money in 2010, they must have paid some dividend.
Explanation / Answer
THERE CAN BE TWO ANSWERS FOR THIS OUT OF THE GIVEN FOUR OPTIONS:
1] The company must have had net income equal to zero in 2010.
3] If the company's net income in 2010 was $200 million, dividends paid must have also equaled $200 million
BUT LOOKING AT THE COMPANY
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