I\'m having trouble with question 10P of Chapter 3 in Principals of Managerial F

Question

I'm having trouble with question 10P of Chapter 3 in Principals of Managerial Finance, 14th edition. Can you please help me? Thank you

Statement of retained earnings Hayes Enterprises began 2015 with a retained earnings
balance of $928,000. During 2015, the firm earned $377,000 after taxes. From
this amount, preferred stockholders were paid $47,000 in dividends. At year-end
2015, the firm’s retained earnings totaled $1,048,000. The firm had 140,000 shares
of common stock outstanding during 2015.
a. Prepare a statement of retained earnings for the year ended December 31, 2015,
for Hayes Enterprises. (Note: Be sure to calculate and include the amount of cash
dividends paid in 2015.)
b. Calculate the firm’s 2015 earnings per share (EPS).
c. How large a per-share cash dividend did the firm pay on common stock during
2015?

Explanation / Answer

Dividends paid to common stockholders retained earnings - opening balance 928000 Add : net income for the year 377000 Less : Dividends paid - preferred stockholders 47000 retained earnings - closing balance 1048000 Dividends paid to common stockholders 210000 a) Statement of retained earnings retained earnings - opening balance 928000 Add : net income for the year 377000 Less : Dividends paid - preferred stockholders 47000 Dividends paid - common stockholders 210000 retained earnings - closing balance 1048000 b) Earning per share = ( Net Income - preferred dividend) /Common shares outstanding                                     = ( 377000 - 47000)/140000                                     = 330000 / 140000                                     = 2.36 c) per share cash dividend = Annual dividend / Number of shares = 210000 / 140000                                                    = 1.5

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