Raffles Ltd began the financial year on 1 January with retained profits of $10 000 and by year end on 31 December retained profits had risen to $30 000. If a profit of $60 000 was earned during the year, then the amount declared and/or paid in dividends during the period would be:
A) $20 000.
B) $30 000.
C) $40 000.
D) $50 000.

Question

Quizplus · Accepted Answer

The amount declared and/or paid in dividends is calculated by starting with the profit earned during the year ($60,000), then subtracting the increase in retained profits ($30,000 - $10,000 = $20,000). So, $60,000 - $20,000 = $40,000.

Raffles Ltd Began the Financial Year on 1 January with Retained