On January 1, 2013, a company's balance in retained earnings was $10,000,000. At December 31, 2013, the balance in retained earnings was $9,400,000. If the company earned net income of $440,000 during the year, how much were dividends?

Question

Quizplus · Accepted Answer

The decrease in retained earnings from $10,000,000 to $9,400,000 is $600,000. Since the company earned $440,000, the dividends must have been $1,040,000 to account for the decrease.

On January 1, 2013, a Company's Balance in Retained Earnings