Perlman Company Had 100,000 Common Shares and 20,000 Preferred Shares

question 123

Multiple Choice

Perlman Company had 100,000 common shares and 20,000 preferred shares at the end of the year just completed.Preferred shareholders received total dividends of $140,000.Common shareholders received total dividends of $210,000.If the dividend payout ratio for the year was 70%,what was the net income for the year?

• A) $147,000.
• B) $287,000.
• C) $300,000.
• D) $440,000.NI = 3 * 100,000 + 140,000 = $440,000.

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Definitions:

Monetary Value

Monetary value represents the worth of an item, service, or asset expressed in terms of money or currency.

Net Income

The final amount a company retains as earnings after subtracting costs and taxes from its gross income.

Revenue

The total amount of money a company generates from its business activities, such as sale of goods or services, before any expenses are subtracted.

Asset

Property or something of value owned by a person or business that is considered as a resource having economic value expected to provide future benefits.