At January 1, 2011, Poole Reported Retained Earnings of $50,000

question 124

Multiple Choice

At January 1, 2011, Poole reported Retained Earnings of $50,000.Dividends for the year totalled $10,000.At December 31, 2011, the company will report Retained Earnings of

• A)$13,500.
• B)$36,500.
• C)$40,000.
• D)$43,500.

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Definitions:

Conversion Premium

The additional amount an investor pays over the current market price of a convertible security compared to the conversion value of the stock.

Convertible Bond

A bond which allows conversion into a specified amount of the issuing company's stock, often at the choice of the holder.

Conversion Ratio

The specific quantity of shares an investor can receive for each convertible security if they choose to convert it into equity.

Pay-in-Kind Bond

A bond that pays interest in the form of additional bonds or securities instead of cash, often used by companies seeking to preserve cash flow.