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21 April, 08:11

Fashion, Inc. had a Retained Earnings balance of $10,000 at December 31, 2018. The company had an average annual income of $6,000 over the next 3 years, and an ending Retained Earnings balance of $13,000 at December 31, 2021. What was the total amount of dividends paid over the last three years?

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  1. 21 April, 08:14
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    Total Dividend = $20000

    Explanation:

    Total Income for 3 Years = 3*Average income

    = 3 * 6000 = $18000

    Opening Retained Earnings $10,000

    Closing Retained Earnings $13,000

    Net Utilisation for Dividend = 13000 - 10000 = $2000

    Total Dividend = Total Income+Net utilisation from RE

    =18000 + 2000 = $20000
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