The year-end 2013 balance sheet of Brandex Inc. listed common stock and other paid-in capital at $2,600,000 and retained earnings at $4,900,000. The next year, retained earnings were listed at $5,200,000. The firm's net income in 2014 was $1,050,000. There were no stock repurchases during the year. What were the dividends paid by the firm in 2014?

Question

Jordon Villa

Mathematics

21 March, 05:09

The year-end 2013 balance sheet of Brandex Inc. listed common stock and other paid-in capital at $2,600,000 and retained earnings at $4,900,000. The next year, retained earnings were listed at $5,200,000. The firm's net income in 2014 was $1,050,000. There were no stock repurchases during the year. What were the dividends paid by the firm in 2014?

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Answers (1)

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Sydnee Branch · Answer 1

Answer: Dividend paid = $750,000

Explanation:

In order to compute the dividends paid by the firm in 2014, we'll use the following formula:

Retained earning at end = Retained earning at beginning + Net income - Dividend paid

$5,200,000 = $4,900,000 + $1,050,000 - Dividend paid

Dividend paid = $4,900,000 + $1,050,000 - $5,200,000

Dividend paid = $750,000