Cash dividends of $45,000 were declared during the year. Cash dividends payable were $10,000 at the beginning of the year and $15,000 at the end of the year. The amount of cash for the payment of dividends during the year is
A) $50,000
B) $40,000
C) $55,000
D) $35,000

Question

Quizplus · Accepted Answer

The dividends payable at the beginning of the year is not to be included in the payment of dividends during the year because it was already included in the previous year's payment of dividends. Therefore, the amount of cash for the payment of dividends during the year is:
Dividends declared: $45,000
Add: Dividends payable at the end of the year: $15,000
Less: Dividends payable at the beginning of the year: $10,000
Total payment of dividends during the year: $50,000 - $10,000 = $40,000.

Cash Dividends of $45,000 Were Declared During the Year