Aikman Company has paid dividends of $2,410,$0,$1,570 and $1,060 over the first four years of the company's existence.If Retained Earnings after year four has an ending balance of $9,700,what is the average annual amount of net income (loss)over the past four years for Aikman?
A)$3,685.
B)$14,740.
C)$840.

Question

Quizplus · Accepted Answer

The total dividends paid over four years is $2,410 + $0 + $1,570 + $1,060 = $5,040. If the ending balance of Retained Earnings is $9,700, the total amount of net income over four years is the sum of Retained Earnings and total dividends paid, which is $9,700 + $5,040 = $14,740. The average annual amount of net income over four years is $14,740 / 4 = $3,685.

Aikman Company Has Paid Dividends of $2,410,$0,$1,570 and $1,060 Over