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Your company has issued common but no preferred stock. Sales for the year = $10,000,000 while...

Your company has issued common but no preferred stock. Sales for the year = $10,000,000 while cost of goods sold = $6,000,000. You are in a 21% Federal tax bracket. You decided to keep some of the profits in the company for growth and accordingly the retained earnings balance increased $300,000. Your company paid common dividends of $2.00 per share on the 50,000 shares of stock outstanding. OK, given all this, what was your company's earnings for the year?

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Answer #1
Answer: Earnings for the year = $400,000
Explanation and calculation:
Earnings for the year = Increase in retained earnings + Dividends paid = $300000+50000*$2 = $      4,00,000
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