On January 1,2014,A-Best Company's balance in retained earnings was $70,000.At the end of the year,December 31,2014,the balance in retained earnings was $94,000.During 2014,the company earned net income of $40,000.How much were dividends?

Question

Quizplus · Accepted Answer

The change in retained earnings is $24,000 ($94,000 - $70,000). Since the net income was $40,000, dividends must have been $16,000 ($40,000 - $24,000).

On January 1,2014,A-Best Company's Balance in Retained Earnings Was $70,000