Perlman Company had 100,000 common shares and 20,000 preferred shares at the end of the year just completed.Preferred shareholders received total dividends of $140,000.Common shareholders received total dividends of $210,000.If the dividend payout ratio for the year was 70%,what was the net income for the year?
A) $147,000.
B) $287,000.
C) $300,000.
D) $440,000.NI = 3 * 100,000 + 140,000 = $440,000.

Question

Quizplus · Accepted Answer

We can use the formula: 
Dividend Payout Ratio = Total dividends paid / Net Income

Substituting the given values, we get: 
0.7 = (140,000 + 210,000) / Net Income 
Net Income = $440,000

Therefore, the net income for the year was $440,000, which is option D.

Perlman Company Had 100,000 Common Shares and 20,000 Preferred Shares