Company operates 06 W / net income prior to income taxes $ 218,000 complete. Reserve comparative measure to 40% VAT as well as needs $ 32,000 in dividends upon elite shares upon credit upon distinction 85,000 shares of superb usual stock. If the Company paid dividends upon the usual batch of $ 0 80 per share, how most dollars would accumulate to defended earnings. I wish to see the work differently, I will never assimilate how this in the future.
HOMEWORK HELP FINANCE BUSINESS?
Previous post: GETTING THE CASH FLOW BUSINESS
Next post: 2SB DIGEST: ADVICE FOR SMALL BUSINESS START-UPS HAVE YOU NEVER HEARD BEFORE
{ 1 comment… read it below or add one }
Dividends are paid only after taxes have been paid.
Profit before tax $218,000
Tax at 40% ($87,200)
Profit after tax $130,800
Less:
Preferred stock dividend ($32,000)
Common stock dividend ($68,000) – 85,000 shares x $0.80
Bal. to go to Retained Earnings $30,800