Question

Retained earnings balance at the beginning of the year $ 135,000 Cash dividends declared for the year 55,000 Proceeds from the sale of equipment 90,000 Gain on the sale of equipment 8,800 Cash dividends payable at the beginning of the year 27,000 Cash dividends payable at the end of the year 30,800 Net income for the year 101,000 The amount of cash dividends paid during the year would be:

Answer 1

Answer:

$51,200 was the cash dividends paid

Explanation:

Cash dividends paid=opening cash dividends payable +cash dividends declared-closing cash dividends payable

opening cash dividends payable is $27,000

cash dividends declared is $55,000

closing cash dividends payable is $30,800

cash dividends paid =$27,000+$55,000-$30,800=$51,200

The amount of cash transfers made in respect of shareholders dividends in the year is $51,200.

The logic is that the whatever is left unpaid at year end should be deducted from the balance owed year plus the new dividends declared this year