The Following Is a Partial List of Accounts and Balances

Essay

The following is a partial list of accounts and balances for Hatley Hotels Ltd.for the year ended
October 31, 2013. $$\begin{array} { l r } \text { Capital stock } & \$ 1,500,000 \\\text { Dividends paid } & \$ 60,000 \\\text { Net income for the year } & \$ 600,000 \\\text { Retained earnings balance November } 1,2012 & \$ 2,755,400\end{array}$$ A) Prepare the Retained Earnings section of the Statement of Changes in Equity for Hatley for the year.B) What portion of their earnings did they pay out to shareholders in 2013?
C) How much of their income was retained in the business?
D) What was the shareholders' total direct investment in Hatley? What has been their total indirect investment on the company?
E) How do you think companies decide how much of their income to pay out?