A Company Has 200,000 Shares of $1 Par Value Common

question 107

Multiple Choice

A company has 200,000 shares of $1 par value common stock and 20,000 shares of 7%,$100 par,cumulative preferred stock outstanding.The balance in Retained Earnings account at the beginning of the year was $1,500,000 and one year's dividends were in arrears.Net income for the current year was $2,000,000.If the company paid a dividend of $3 per share on its common stock,what is the balance in Retained Earnings account at the end of the year?

• A)$3,500,000
• B)$2,900,000
• C)$2,760,000
• D)$2,620,000
• E)$620,000

---

Definitions:

Salisbury Cathedral

A historic Anglican cathedral in Salisbury, England, known for having the tallest church spire in the UK and its early English Gothic architecture.

Pointed Arches

An architectural element characteristic of Gothic style, featuring arches with pointed apexes, which allowed for higher structures and larger windows.

Naumburg Master

A term used to describe an unidentified German sculptor or group of sculptors of the 13th century, famous for their work in the Naumburg Cathedral.

Master Honoré

A noted Parisian miniature painter from the late 13th and early 14th centuries, known for his work in illuminated manuscripts.