Memorial Corporation
Information from the financial records is presented in the following table:
$\begin{array}{lr}
\text { Retained earnings, December 31, Year 2 } & \$ 400,000 \
\text { Retained earnings, December 31, Year 1 } & 250,000 \
\text { Dividends payable, December 31, Year 2 } & 20,000 \
\text { Dividends payable, December 31, Year 1 } & 30,000 \
\text { Net income for Year 2 } & 200,000
\end{array}$
-Refer to the figure Memorial Corporation.How much cash was paid for dividends during Year 2?

Question

Memorial Corporation
Information from the financial records is presented in the following table:
 $\begin{array}{lr}
\text { Retained earnings, December 31, Year 2 } & \$ 400,000 \
\text { Retained earnings, December 31, Year 1 } & 250,000 \
\text { Dividends payable, December 31, Year 2 } & 20,000 \
\text { Dividends payable, December 31, Year 1 } & 30,000 \
\text { Net income for Year 2 } & 200,000
\end{array}$
-Refer to the figure Memorial Corporation.How much cash was paid for dividends during Year 2?

Quizplus · Accepted Answer

The change in retained earnings is $150,000 ($400,000 - $250,000). Given the net income of $200,000, the difference of $50,000 ($200,000 - $150,000) represents dividends declared. Considering the change in dividends payable ($30,000 - $20,000 = $10,000), the cash paid for dividends is $60,000 ($50,000 declared + $10,000 decrease in payable).

Memorial Corporation Information from the Financial Records Is Presented in the Following

Memorial Corporation
Information from the Financial Records Is Presented in the Following