Galveston Corporation’s ending balance of Retained Earnings increased by $2 million from the beginning of the year. The company’s net income for the year was $3.1 million. What is the amount of dividends that were declared and paid?

Galveston Corporation’s ending balance of Retained Earnings increased by $2 million from the beginning of the year. The company’s net income for the year was $3.1 million. What is the amount of dividends that were declared and paid?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 6P: In its most recent financial statements, Del-Castillo Inc. reported 70 million of net income and 900...

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Question

Galveston Corporation’s ending balance of Retained Earnings increased by $2
million from the beginning of the year. The company’s net income for the year
was $3.1 million. What is the amount of dividends that were declared and paid?

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

Expert Solution

Step 1

Dividend per share:

Dividend per share is calculated for Preferred stock as well as Common Stock. Dividend per share is shown and the Statement of Profit & Loss. Dividend per share denotes the earnings distributed per share.

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