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Ksenya-84 [330]
3 years ago
10

Fashion, Inc. had a Retained Earnings balance of $13,000 at December 31, 2018. The company had an average annual income of $6,50

0 over the next 3 years, and an ending Retained Earnings balance of $13,000 at December 31, 2021. What was the total amount of dividends paid over the last three years?
1.$18,750.
2.$19,500.
3.$21,000.
4.$22,500.
Business
1 answer:
kompoz [17]3 years ago
6 0

Answer:

2.$19,500.

Explanation:

The computation of the amount of dividend is shown below:

As we know that

Ending retained earning balance = Beginning retained earning balance + net income - cash dividend paid

$13,000 = $13,000 + $6,500 × 3 years - cash dividend paid

So, the cash dividend paid is $19,500

We simply applied the above formula

Hence, the correct option is 2.

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