Question

The following information for Kellman Inc. is available at the end of 2019.Total assets on 12/31/2018 $72,500Total assets on 12/31/2019 78,300Total liabilities on 12/31/2018 12,100Total liabilities on 12/31/2019 9,800Common stock on 12/31/2018 50,000Common stock on 12/31/2019 50,000Net income for 2019 14,700Calculate the amount of dividends reported on the retained earnings statement for 2019.

Answer 1

Answer:

The di vidend amount is $ 6,600

Explanation:

                                                    12/31/2018                         12/31/2019

                                                           $                                        $

Total Assets                                  72,500                                78.300

Total Liabilities                               12,100                                   9,800

Common Stock                              50,000                              50,000

Retained Earnings ( balancing)     10,400                                18,500

Based on the data tabulated above, the increase in Retained earnings is $ 18,500 - $ 10,400    =  $ 8,100

Retained Earnings Ending = Retained Earnings Beginning + Net Income - Dividends

$ 18.500 = $ 10,400 + 14.700 - Dividends

so by solving the equation, the dividend amount is $ 10,400 + $ 14 700 - $ 18,500  = $ 6,600