Cash dividends and two classes of stock

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Reference no: EM131219402

Cash dividends and two classes of stock Raymond Inc., has two classes of capital stock outstanding: 25,000 shares of 5%, $100 par value cumulative preferred and 30,000 shares of $10 par value common. The company had a deficit (negative balance in retained earnings) of $160,000 at the beginning of the current year, and preferred dividends were three years in arrears. During the current year, the company earned net income of $970,000. What will be the balance in the Retained Earnings account at the end of the current year if the company takes all the actions necessary to pay a dividend of $2.50 per share on the common stock? $________________

Reference no: EM131219402

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