On January 1, 2019, a company's balance in retained earnings was $10,000,000. At December 31, 2019, the balance in retained earnings was $9,400,000. If the company earned net income of $440,000 during the year, how much were dividends?

Question

Quizplus · Accepted Answer

The change in retained earnings is calculated as the ending balance minus the beginning balance plus dividends. So, $9,400,000 (ending) - $10,000,000 (beginning) + Dividends = $440,000 (net income). Solving for dividends gives $1,040,000.

On January 1, 2019, a Company's Balance in Retained Earnings