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frutty [35]
4 years ago
8

Suppose for a particular year a firm had comprehensive income of $9,000, a beginning book value of equity of $76,000, and an end

ing book value of equity of $77,000. Using the clean surplus accounting relation, how much were the firm's dividends that year?
Business
2 answers:
Papessa [141]4 years ago
8 0

Answer:

<em>$8,000</em>

<em>Explanation:</em>

<em>From the example given, let us recall the following,</em>

<em>A firm had a comprehensive income of =$9,000</em>

<em>A beginning book value of equity =$76,000</em>

<em>The ending book value of equity = $ 77,000</em>

<em>Then</em>

<em>By using the clean surplus accounting relation, the firm's dividends for that year is:</em>

<em>(Comprehensive income + book value of equity) - Ending book value of equity</em>

<em>The final value becomes </em>

<em>= $9,000 + $76,000 - $77,000 = $8,000</em>

<em />

<em />

spin [16.1K]4 years ago
5 0

Answer:

B. $8000

Explanation:

Given that

Income = $9000

Beginning book value = 76000

Ending book value = 77000

Dividends = Income + beginning book value of equity - ending book value of equity.

Therefore,

Dividends = 9000 + 76000 - 77000

= 85000 - 77000

= $8000

Thus, dividends for the following year given the following data is = $8000

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