For a Two-Year Period Following a Properly Implemented Financial Reorganization

Multiple Choice

For a two-year period following a properly implemented financial reorganization, Grant Corporation operated profitably and paid dividends equal to 10% of its net income in each year. How could one determine that the financial reorganization had occurred?

A) could not unless comparative statements of financial position were presented
B) from the shareholders' equity section
C) by the conservative dividend policy
D) from the disclosure of the reorganization in the notes to the financial statements