On Its 2014 Balance Sheet, Barngrover Books Showed $510 Million

question 12

Multiple Choice

On its 2014 balance sheet, Barngrover Books showed $510 million of retained earnings, and exactly that same amount was shown the following year in 2015. Assuming that no earnings restatements were issued, which of the following statements is CORRECTσ

• A) dividends could have been paid in 2015, but they would have had to equal the earnings for the year.
• B) if the company lost money in 2015, they must have paid dividends.
• C) the company must have had zero net income in 2015.
• D) the company must have paid out half of its earnings as dividends.
• E) the company must have paid no dividends in 2015.

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Definitions:

Sustainable Innovation

The development of new products, processes, or services that meet current needs without compromising the ability of future generations to meet their own needs, often with a focus on environmental sustainability.

Quarterly Earnings

A report of a company's financial performance, including revenue and profit, issued every three months.

Resource Constraints

Limitations in the availability of resources such as finances, materials, and human capital that can affect an organization's ability to achieve its goals.

Short-termism

A mindset or approach prioritizing short-term gains over long-term goals and strategies.