Retained Earnings had a balance on January 1, 2020, and December 31, 2020, respectively, of $234,500 and $411,000. Net income for the year was $199,500 and the only other event affecting
Retained Earnings was the declaration of dividends. If there was no change in the Dividends account during the year, the payments for dividends was:

Question

Quizplus · Accepted Answer

The change in Retained Earnings is the net income minus dividends. The increase in Retained Earnings is $411,000 - $234,500 = $176,500. Since net income is $199,500, dividends paid must be $199,500 - $176,500 = $23,000.

Retained Earnings Had a Balance on January 1, 2020, and December