Question

On 12/31/2020, Heaton Industries Inc. reported retained earnings of $425,000 on its balance sheet, and it reported that it had $172,500 of net income during the year. On its previous balance sheet, at 12/31/2019, the company had reported $555,000 of retained earnings. No shares were repurchased during 2020. How much in dividends did Heaton pay during 2020? Select the correct answer. a. $302,442 b. $302,269 c. $302,327 d. $302,384

Answer 1

Answer:

The amount of dividend paid by Heaton:         $

Retained profit as at 31/12/2019                   555,000

Add: Net income for the year                       172,500

                                                                       727,500

Less: Retained earnings as at 31/12/2020   425,000

Dividend paid in 2020                                  302,500

The amount of dividend paid in 2020 is $302,500, which is close to $382,442.

The correct answer is A

Explanation:

The dividend paid in 2020 equals the retained earnings at the end of 2019 plus the net income for the year minus the retained earnings at the end of 2020.