During the first year of operations, Sunset Surfwear issued 18,500 shares of $10 par common stock. At the end of the year, the corporation had net income of$380,000. The board of directors declared a $5 cash dividend per share of common stock. Answer the following questions in your working papers: 1. How much of the net income earned for the year was paid to the common stockholders? 2. How much of the net income was retained by the corporation?
Step 11 of 2
Distribution to stockholders:
= 18,500 $5
Net income retained:
= $380,000 - $92,500
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