9 June, 22:08

# Superior has provided the following information for its recent year of operation:The common stock account balance at the beginning of the year was \$20,000 and the year-end balance was \$25,000.The additional paid-in capital account balance increased \$2,500 during the year.The retained earnings balance at the beginning of the year was \$75,000 and the year-end balance was \$91,000.Net income was \$26,000.How much were Superior's dividend declarations during its recent year of operation?A. \$10,000.B. \$42,000.C. \$26,000.D. The dividend declarations can not be determined given the above information.

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1. 9 June, 22:25
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Option (a) is correct.

Explanation:

Given that,

Beginning balance of Retained Earnings = \$75,000

Net income = \$26,000

Ending retained earnings = \$91,000

Total Balance during the year:

= Beginning balance of Retained Earnings + Net income

= \$75,000 + \$26,000

= \$101,000

Dividend declared:

= Total Balance during the year - Ending retained earnings

= \$101,000 - \$91,000

= \$10,000

Therefore, the amount of dividend declared by the Superior during its recent year of operation is \$10,000.