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Canada showed the following equity on its December 31, 2014, balance sheet: Contributed capital preferred shares, $2 non-cumulative authorized: 50,000Issued and outstanding: 0…………………………………………………………………… $ -0-Common shares authorized: UnlimitedIssued and outstanding:
50,000…………………………………………………….. 6,800,000Total contributed capital………………………………………………………………….. $ 6,800,000Retained earnings …………………………………………………………………………… 3,800,000Total equity ………………………………………………………………………………………. $10,600,000The shareholders of CanaCo expressed concerns to the board of directors at the recent annual meeting that the market price of their shares has not changed significantly over the past 18 months, yet the company is very profitable. Net income for each of the past three years has been $1,800,000, $2,300,000, and $3,500,000, respectively. Cash dividends were paid in each of these years equal to 50% of net income. Required Using the elements of critical thinking described on the inside front cover, comment. Get Accounting Help Today
