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jeka57 [31]
3 years ago
13

retained earnings of $105000. During 2022, the company issued $79500 of common stock for cash. The company recorded revenues of

$748000, expenses of $637000, and paid dividends of $36000. What was Skysong's net income for the year 2022?
Business
1 answer:
mr_godi [17]3 years ago
7 0

Answer:

$111,000

Explanation:

net income for Skysong during 2022:

total revenues       $748,000

<u>- total expenses   ($637,000)</u>

net income              $111,000

Net income is not affected by new common stocks being issued, since no interests is paid.

It affects dividends because without net income dividends cannot be distributed, but dividends do not affect net income,

Retained earnings are increased by net income after taxes (= $111,000 x 79% = $87,690) - distributed dividends $36,000 = $51,690

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Answer and Explanation:

The computation is shown below:

As we know that

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= 3% + 1 × 6%

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For Company B

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As we can see that the forecast return should be lower than the required return so we should not invest in company A also the same is done in company B too

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