On January 1, 2015, A-Best Company's balance in retained earnings was $70,000.At the end of the year, December 31, 2015, the balance in retained earnings was $94,000.During 2015, the company earned net income of $40,000.How much were dividends?

Question

Quizplus · Accepted Answer

The change in retained earnings is $24,000 ($94,000 - $70,000). Since the net income was $40,000, dividends must have been $16,000 ($40,000 - $24,000).

On January 1, 2015, A-Best Company's Balance in Retained Earnings