At the beginning of the current year, Sutton Corp. had 400,000 shares of $1 par

Question

At the beginning of the current year, Sutton Corp. had 400,000 shares of $1 par common stock outstanding and had retained earnings of $8,000,000. During the year, the company earned $6,000,000, declared a 5% stock dividend when the price of stock was $25 per share and paid a year end cash dividend of $3 per share. The cash dividend was paid after the stock dividend had been distributed.) Sutton Corp. retained earnings at the end of the year amount to: A) $12,240,000 B) 12,720,000 C) $14,000,000 D) $12,740,000

Explanation / Answer

B) 12,720,000

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