Memorial Corporation Information from the financial records is presented below:
$\begin{array}{l}
\text { Retained earnings, December 31,2014 } &\$ 400,000 \
\text { Retained earnings, December 31, 2013 } &250,000 \
\text { Dividends payable, December 31, 2014 } &20,000 \
\text { Dividends payable, December 31, 2013 } &30,000 \
\text { Net income for 2014 } &200,000
\end{array}$
-Refer to Memorial Corporation.Assume that there were no retained earnings transactions other than those dealing with dividends and net income.Dividends declared during 2014 totaled:

Question

Memorial Corporation Information from the financial records is presented below:
$\begin{array}{l}
 \text { Retained earnings, December 31,2014  } &\$ 400,000 \
 \text { Retained earnings, December 31, 2013  } &250,000 \
 \text { Dividends payable, December 31, 2014 } &20,000 \
 \text { Dividends payable, December 31, 2013 } &30,000 \
 \text { Net income for 2014 } &200,000
\end{array}$ 
-Refer to Memorial Corporation.Assume that there were no retained earnings transactions other than those dealing with dividends and net income.Dividends declared during 2014 totaled:

Quizplus · Accepted Answer

We can find the dividends declared during 2014 by looking at the change in dividends payable from 2013 to 2014.

Dividends declared during 2014 = Dividends payable, December 31, 2014 - Dividends payable, December 31, 2013

= $20,000 - $30,000

= -$10,000

This means that there was a decrease in dividends payable from 2013 to 2014. In other words, $10,000 of dividends that were payable in 2013 were paid in 2014.

Since the company paid $20,000 in dividends during 2014, we can calculate the total dividends declared by adding the amount paid in 2014 to the amount of dividends that were payable in 2014 but were declared in 2013:

Total dividends declared = Dividends paid in 2014 + Dividends payable, December 31, 2013 - Dividends payable, December 31, 2014

= $20,000 + $30,000 - $20,000

= $30,000

Therefore, the correct answer is (D) $50,000.

Memorial Corporation Information from the Financial Records Is Presented Below