In the first three years of operations,Lindsey Corporation earned net income/loss of -$150,000,$100,000,and $250,000.At the end of the third year,Lindsey Corporation has a balance of $120,000 for its Retained Earnings account.What is the total amount of dividends Lindsey Corporation paid over the three years?

Question

Quizplus · Accepted Answer

The total net income for the first three years is (-$150,000) + $100,000 + $250,000 = $200,000. If we add this to the Retained Earnings balance of $120,000, we get the total equity earned by the company of $320,000. Dividends paid out would then be equal to earnings minus retained earnings or $320,000 - $240,000 (net income of first two years) = $80,000. Therefore, option C is correct.

In the First Three Years of Operations,Lindsey Corporation Earned Net