The Retained Earnings balance was $64,120 on January 1.Net income for the year was $50,680.If Retained Earnings had a credit balance of $66,640 after closing entries were made for the year,and if additional stock of $14,560 was issued during the year,what was the amount of dividends declared during the year?

Question

Quizplus · Accepted Answer

Ending Retained Earnings = Beginning Retained Earnings + Net income − Dividends
Dividends = Beginning Retained Earnings + Net income − Ending Retained Earnings
= $64,120 + $50,680 − $66,640 = $48,160
The additional stock of $14,560 issued during the year has no bearing on the calculation.

The Retained Earnings Balance Was $64,120 on January 1