Perez Corporation Has 100,000 Shares of $1 Par Value Common

question 120

Multiple Choice

Perez Corporation has 100,000 shares of $1 par value common stock and 20,000 shares of 8% cumulative preferred stock, $100 par value, outstanding. The balance in Retained Earnings at the beginning of the year was $1,600,000, and one year's dividends were in arrears. Net income for the current year was $870,000. If Perez Corporation paid a dividend of $2 per share on its common stock, what is the balance in Retained Earnings at the end of the year?

• A) $2,150,000.
• B) $2,270,000.
• C) $2,110,000.
• D) $1,950,000.

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