Question

Cash dividends of $85,000 were declared during the year. Cash dividends payable were $10,000 and $15,000 at the beginning and end of the year, respectively. The amount of cash for the payment of dividends during the year is

Answer 1

The amount of cash for the payment of dividends during the year is $80,000

What is the cash amount paid as dividends in the year?

The task at hand is to determine the amount of actual cash paid to shareholders as dividends in the year under review, which takes into consideration the amount of cash dividends declared in the year, the amount of dividends outstanding at the beginning of the year as well as the amount as at the end of the year.

$10,000 was unpaid at the beginning of the year, when declared during the year, which is $85,000 is added to it, we have $95,000 which the shareholders are expecting from the company.

The fact that at the end of the year, only $15,000 is unpaid means that out of the $95,000, $80,000 has been paid leaving us with an unpaid balance of just $15,000

cash dividends paid=beginning unpaid+ declared amount-amount unpaid at the end of the year

cash dividends paid=$10,000+$85,000-$15,000

cash dividends paid=$80,000

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