On 12/31/19,Hite Industries reported retained earnings of $537,500 on its balance sheet,and it reported that it had $135,000 of net income during the year.On its previous balance sheet,at 12/31/18,the company had reported $445,000 of retained earnings.No shares were repurchased during 2019.How much in dividends did the firm pay during 2019?

Question

Quizplus · Accepted Answer

The dividends paid can be calculated by starting with the retained earnings at the end of 2018, adding the net income for 2019, and then subtracting the retained earnings at the end of 2019. This gives us the amount of dividends paid out during the year.$$ \text{Dividends Paid} = \text{Retained Earnings (12/31/18)} + \text{Net Income} - \text{Retained Earnings (12/31/19)} $$$$ \text{Dividends Paid} = \$445,000 + \$135,000 - \$537,500 = \$42,500 $$Therefore, the firm paid $42,500 in dividends during 2019.

On 12/31/19,Hite Industries Reported Retained Earnings of $537,500 on Its