Question

Information from the financial records is presented in the following table: Retained earnings, December 31, 2014...

Information from the financial records is presented in the following table:

Retained earnings, December 31, 2014 $400,000
Retained earnings, December 31, 2013 250,000
Dividends payable, December 31, 2014 20,000
Dividends payable, December 31, 2013 30,000
Net income for 2014 200,000

There were no retained earnings transactions other than those dealing with dividends and net income. What were total dividends declared during 2014?

How much cash was paid for dividends during 2014?

Business   Accounting   
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Homework Answers

Answer #1

A​​​​​​​nswer: Amount of dividend declared in 2014= $50000

Calculation of dividend decleared in 2014:-

= Opening of Retained Earning + Net Income for 2014 - Closing of Retained Earnings.

= $250000+$200000-$400000

= $50000

Assuming dividend of already being asjusted in Closing balalnce of retained earning of 2013 & 2014

Amount of Cash Paid for Dividend During 2014 = $60000

Calculation of cash paid for dividend in 2014:-

= Dividend Payable of 2013 + [Dividend declared of 2014 - Dividend Payable of 2014]

= $30000 + ($50000-$20000)

= $30000+$30000

= $60000

Hope this meets your purpose. Do let me know in case of any clarification.

Do like the answer if it was helpful. Best of luck...!!

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