New Hampshire Services reported $ 11.0 million of retained earnings on its Decem
ID: 2734797 • Letter: N
Question
New Hampshire Services reported $ 11.0 million of retained earnings on its December 31, 2007 balance sheet. In 2008, the company lost money; its net income was -$500,000 (negative $500,000). Despite the loss, the company still paid a $ 0.75 per share dividend. The company's earnings per share for 2008 were -$2.50 (negative $2.50). What was the level of retained earnings on the company's December 31, 2008 balance sheet? Show your answer to the nearest dollar, but do not use the $ or , signs in your answer.
Explanation / Answer
Retained Earnings as on Dec 31, 2007 11000000 Less: Net Loss for current year -500000 Less: Dividend paid (0.75*200000) -150000 Closing Balance of retained earnings 10350000 No of shares outstanding = -500000/-2.50 = 200000 shares