At the end of 2008, Sherwood Company had retained earnings of $21,240. During 2009, Sherwood had revenues

Question:

At the end of 2008, Sherwood Company had retained earnings of $21,240. During 2009, Sherwood had revenues of $831,400 and expenses of $792,100, and paid cash dividends in the amount of $31,500.

Required:

1. Determine the amount of Sherwood’s retained earnings at December 31, 2009.

2. Comment on Sherwood’s dividend policy.

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...