A corporation has year end 2001 and 2002 retained earnings balances of $320,000 and $400,000,respectively. The firm reported net income after taxes of $100,000 in 2002. The firm paid dividendsin 2002 of___________ .

Question

Quizplus · Accepted Answer

Dividends paid in 2002 = (Retained earnings at end of 2002) - (Retained earnings at end of 2001) - (Net income after taxes)
Dividends paid in 2002 = ($400,000) - ($320,000) - ($100,000) = $20,000

Therefore, the answer is B) $20,000.

A Corporation Has Year End 2001 and 2002 Retained Earnings