Question

Cash dividends of $45,000 were declared during the year. Cash dividends payable were $10,000 at the beginning of the year and $15,000 at the end of the year. The amount of cash for the payment of dividends during the year isA. $50,000B. $40,000C. $55,000 D. $35,000

Answer 1

Answer:

The amount of cash for the payment of dividends during the year is B. $40,000

Explanation:

To Determine the amount of cash for the payment of dividends during the year, we open a Dividends Payable T - Account and find the amount via missing figure approach as follows:

Debits :

Cash (Balancing figure)                          $40,000

Ending of year Dividends Payable          $15,000

Totals                                                        $55,000

Credits :

Beginning of year Dividends Payable    $10,000

Dividends declared during the year      $45,000

Totals                                                        $55,000