On September 1, Year 1, Orville Corporation has unrestricted Retained Earnings of $7,500,000, Appropriated Retained Earnings of $4,500,000, Cash of $9,000,000, and Accounts Payable of $1,000,000. What is the maximum amount that can be used for cash dividends?

Question

Quizplus · Accepted Answer

The maximum amount that can be used for cash dividends is the amount of unrestricted Retained Earnings, which is $7,500,000. Appropriated Retained Earnings are reserved for specific purposes and are not available for dividends. Cash and Accounts Payable are not directly relevant to the calculation of available funds for dividends.

On September 1, Year 1, Orville Corporation Has Unrestricted Retained