Question

Superior has provided the following information for its recent year of operation: The common stock account balance at the beginning of the year was $10,000 and the year-end balance was $15,000. The additional paid-in capital account balance increased $2,600 during the year. The retained earnings balance at the beginning of the year was $65,000 and the year-end balance was $80,000. Net income was $27,000. How much were Superior's dividend declarations during its recent year of operation?

Answer 1

Answer:

The $12,000 dividend declaration is made during its recent year of operation

Explanation:

In this question, we have to apply the formula which is shown below:

The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid

$80,000 = $65,000 + $27,000 - dividend paid

$80,000 = $92,000 - dividend paid

So, the dividend paid equals to

= $92,000 - $80,000

= $12,000

These items would be displayed in the retained earnings statement