On January 2, 2006, Lake Mining Co.’s board of directors declared a cash dividend of $400,000 to stockholders of record on January 18, 2006, payable on February 10, 2006. The dividend is permissible under law in Lake’s state of incorporation. Selected data from Lake’s December 31, 2005 balance sheet are as follows:
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|
Accumulated depletion |
$100,000 |
|
Capital stock |
500,000 |
|
Additional paid-in capital |
150,000 |
|
Retained earnings |
300,000 |
The $400,000 dividend includes a liquidating dividend of
- $0
- $100,000
- $150,000
- $300,000