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Statement of retained earnings Hayes Enterprises began 2015 with a retained earnings
balance of $928,000. During 2015, the firm earned $377,000 after taxes. From
this amount, preferred stockholders were paid $47,000 in dividends. At year-end
2015, the firm’s retained earnings totaled $1,048,000. The firm had 140,000 shares
of common stock outstanding during 2015.
a. Prepare a statement of retained earnings for the year ended December 31, 2015,
for Hayes Enterprises. (Note: Be sure to calculate and include the amount of cash
dividends paid in 2015.)
b. Calculate the firm’s 2015 earnings per share (EPS).
c. How large a per-share cash dividend did the firm pay on common stock during
2015?
Solution
a)
b) Earning per share = Earning attributable to Common stockholders/ No. of Common Stock
= (377000 - 47000) / 140000
= $ 2.36 per share
c) Cash dividend per share = 210000/140000
= $ 1.50
Hayes Enterprises
Statement of Retained Earnings December 31, 2015
Particulars Amount $ Amount $
beginning Balance 928,000
Add: Earning during the year 377,000
1,305,000
Less: Dividend paid to Preferred Stockholders 47,000 1,258,000
Less: Dividend paid on common Stock 210,000
Closing balance 1,048,000

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Statement of retained earnings Hayes Enterprises began 2015 with a ret.docx

  • 1. Statement of retained earnings Hayes Enterprises began 2015 with a retained earnings balance of $928,000. During 2015, the firm earned $377,000 after taxes. From this amount, preferred stockholders were paid $47,000 in dividends. At year-end 2015, the firm’s retained earnings totaled $1,048,000. The firm had 140,000 shares of common stock outstanding during 2015. a. Prepare a statement of retained earnings for the year ended December 31, 2015, for Hayes Enterprises. (Note: Be sure to calculate and include the amount of cash dividends paid in 2015.) b. Calculate the firm’s 2015 earnings per share (EPS). c. How large a per-share cash dividend did the firm pay on common stock during 2015? Solution a) b) Earning per share = Earning attributable to Common stockholders/ No. of Common Stock = (377000 - 47000) / 140000 = $ 2.36 per share c) Cash dividend per share = 210000/140000 = $ 1.50 Hayes Enterprises Statement of Retained Earnings December 31, 2015 Particulars Amount $ Amount $ beginning Balance 928,000 Add: Earning during the year 377,000 1,305,000 Less: Dividend paid to Preferred Stockholders 47,000 1,258,000 Less: Dividend paid on common Stock 210,000