On its 2012 balance sheet, Barngrover Books showed $510 million of retained earnings, and exactly that same amount was shown the following year in 2012. Assuming that no earnings restatements were issued, which of the following statements is CORRECT?

a. Dividends could have been paid in 2012, but they would have had to equal the earnings for the year.

b. The company must have had zero net income in 2012.

c. The company must have paid no dividends in 2012.

d. If the company lost money in 2012, they must have paid dividends.

e. The company must have paid out half of its earnings as dividends.

Answer rating: 100% (QA)

Answer is A because we know that there is no change in the retained earnings which me... View the full answer