Statement of retained earnings Hayes Enterprises began 2012 with a retained earn

Question

Statement of retained earnings Hayes Enterprises began 2012 with a retained earnings balance of $935,000. During 2012, the firm earned $374,000 after taxes. From this amount, preferred stockholders were paid $54,000in dividends. At year-end 2012, the firm's retained earnings totaled $1,060,000. The firm had 143,000 shares of common stock outstanding during 2012.

a. Prepare a statement of retained earnings for the year ended December 31, 2012, for Hayes Enterprises.

b. Calculate the firm's 2012 earnings per share (EPS).

c. How large a per-share cash dividend did the firm pay on common stock during 2012?

a) Cash dividends paid in common stock are $______

Haynes Enterprises

Statment of Retained Earnings

for the Year Ended December 31, 2012

Retained earnings balance (Jan 1, 2012) $______

Plus: Net profit after Taxes (for 2012) ________

Less: Cash dividends(paid during 2012)

Preferred Stock __________

Common Stock ___________

Retianed Earnings (dec. 31, 2012). $ ___________

B) The firms 2012 earings per share are $

C) The cash dividends paid on common stock during 2012 was $

Explanation / Answer

COMMON STOCK DIVIDEND PAID = RETAINED EARNINGS IN THE BEGINNING + (EARNINGS AFTER TAX FOR THE YEAR - PREFERRED DIVIDEND) - RETAINED EARNINGS AT THE END

COMMON STOCK DIVIDEND PAID = 935000 + (374000 - 54000) -1060000 = 195000

(a)Statment of Retained Earnings

for the Year Ended December 31, 2012

Retained earnings balance (Jan 1, 2012) : $ 935,000

Plus: Net profit after Taxes (for 2012) : $374,000

Less: Cash dividends(paid during 2012) : $ 249,000

Preferred Stock : $54,000

Common Stock : $195000

Retained Earnings (dec. 31, 2012). $ : $1060,000

B) The firms 2012 earnings per share are =($374,000 - $54000)/143000 = $2.24 per share

C) The cash dividends paid on common stock during 2012 was $195000

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