On April 1, Bonita Corporation's retained earnings account had a balance of $785,000. During April, Bonita had revenues of $135,000 and expenses of $93,000. On April 30, retained earnings had a balance of $811,500. What amount of dividends were paid during April?

Question

Quizplus · Accepted Answer

The net income for April is $135,000 (revenues) - $93,000 (expenses) = $42,000. The change in retained earnings is $811,500 (ending balance) - $785,000 (beginning balance) = $26,500. Therefore, dividends paid = net income - change in retained earnings = $42,000 - $26,500 = $15,500.

On April 1, Bonita Corporation's Retained Earnings Account Had a Balance