On 12/31/12,Heaton Industries Inc.reported retained earnings of $675,000 on its balance sheet,and it reported that it had $172,500 of net income during the year.On its previous balance sheet,at 12/31/11,the company had reported $555,000 of retained earnings.No shares were repurchased during 2012.How much in dividends did Heaton pay during 2012?

Question

Quizplus · Accepted Answer

Retained earnings at the end of 2012 = Retained earnings at the end of 2011 + Net income - Dividends
$675,000 = $555,000 + $172,500 - Dividends
Dividends = $52,500. Therefore, the best choice is C.