In 2011, Oceanview Co

question 74

Multiple Choice

In 2011, Oceanview Co.reported net income of $75,000 and declared a dividend of $40,000.The dividend is to be paid on February 1, 2012 to shareholders of record on January 15, 2012.The balance in the retained earnings account on January 1, 2011 was $140,000.At Ocean's year end on December 31, 2011 the company reported the following ending balance on the statement of shareholders' equity:

• A)$ 35,000
• B)$ 115,000
• C)$ 175,000
• D)$ 215,000

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Definitions:

Cash Dividend

A payment made by a company out of its profits to its shareholders, usually in cash.

Net Income

The net income of a company once all costs and taxes are deducted from its total revenue.

Short-Term Stock Investments

Investments in stocks that are intended to be held for a short period, typically less than one year, for earning quick profits.

Cash Dividends

Payments made by a corporation to its shareholder members. It is the share of profits distributed.