Question: The Retained earnings account for Nathan Corporation had a credit balance of $800,000 at the end of 2013. Selected transactions during 2014 follow: a. Net income was $130,000. b. Cash dividends declared were $60,000. c. Repurchased 100 shares of Nathan Corporation common stock, paying $20 per share. Each share has a $5 par value and was originally issued for $35. d. Sold 20 shares of Nathan Corporation common stock for $22 each.
Required: Calculate Nathan's retained earnings balance as of the end of 2014. What is the maximum dividend Nathan could have declared in 2014? Assume there are no legal or contractual restrictions that apply.