The ending Retained Earnings balance of Lambert Inc.increased by $1.5 million from the beginning of the year.The company's net income earned during the year is $3.5 million.What is the amount of dividends Lambert Inc.declared and paid?

Question

Quizplus · Accepted Answer

The increase in Retained Earnings is equal to the Net Income minus the dividends paid out. Therefore, Retained Earnings increased by $1.5 million and Net Income was $3.5 million. Subtracting the two, we get $2 million for dividends declared and paid out. Therefore, the answer is C.

The Ending Retained Earnings Balance of Lambert Inc