The retained earnings account began the year with a balance of $700,000 which was increased with net income of $250,000.If the ending balance of retained earnings was $800,000 and all dividends declared were paid how much cash was paid for dividends during the year.

Question

Quizplus · Accepted Answer

The ending retained earnings balance is $800,000. Starting with $700,000 and adding $250,000 net income gives $950,000. The difference of $150,000 was paid as dividends.

The Retained Earnings Account Began the Year with a Balance