Answer to Question #36598 in Finance for BGordon

Question

2 On its 2012 balance sheet, Barngrover Books showed $510 million of retained earnings, and
exactly that same amount was shown the following year in 2013. Assuming that no earnings
restatements were issued, which of the following statements is CORRECT? Why?

a. Dividends could have been paid in 2013, but they would have had to equal the earnings
for the year.
b. If the company lost money in 2013, they must have paid dividends.
c. The company must have had zero net income in 2013.
d. The company must have paid out half of its earnings as dividends.
e. The company must have paid no dividends in 2013.