Answer:
b. $556,000.
Explanation:
Retained Earning is an account where all the earnings of the company accumulate and dividend is also paid from this account because it represents the amount the earning associated with the stockholders of the company.
December 31, 2018 Balance of Retained Earning = December 31, 2017 Balance of Retained Earning + Income for the year - Dividend Paid / Declared during the year.
$1,164,000 = $1,440,000 + $1,000,000 - Dividend Paid / Declared during the year.
$1,164,000 = $2,440,000 - Dividend Paid / Declared during the year.
Dividend Paid / Declared during the year = $2,440,000 - $1,164,000
Dividend Paid / Declared during the year = $1,276,000
Stock Dividend Paid - $500,000 + $220,000 = $720,000
Cash Dividend Paid = $1,276,000 - $720,000 = $556,000
