At the beginning of 2019, Cameron Companys retained earnings was $212,000. For 2019, Cameron has calculated its
Question:
At the beginning of 2019, Cameron Company’s retained earnings was $212,000. For 2019, Cameron has calculated its pretax income from continuing operations to be $120,000.
During 2019, the following events also occurred:
1. During July, Cameron sold Division M (a component of the company). It has determined that the pretax income from the operations of Division M during 2019 totals $39,000 and that a pretax loss of $40,500 was incurred on the sale of Division M.
2. Cameron had 21,000 shares of common stock outstanding during all of 2019. It declared and paid a $1 per share cash dividend on this stock.
Required:
Assuming that all the pretax items are subject to a 30% income tax rate:
1. Complete the lower portion of Cameron’s 2019 income statement, beginning with “Pretax Income from Continuing Operations.”
2. Prepare an accompanying retained earnings statement.
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
Intermediate Accounting Reporting and Analysis
ISBN: 978-1337788281
3rd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach