Question

The board of directors declared cash dividends totaling $1,200,000 during the current year. The comparative balance sheet indicates dividends payable of $250,000 at the beginning of the year and $100,000 at the end of the year. What was the amount of cash payments to stockholders during the year?

Answer 1

Answer:

$1,350,000

Explanation:

The computation of the amount of cash payments to stockholders is shown below:

= Beginning balance of dividend payable + cash dividend declared - ending balance of dividend payable

= $250,000 + $1,200,000 - $100,000

= $1,350,000

To find out the amount of cash payments to stockholders we added the cash dividend declared and deduct the ending balance of dividend payable to the beginning balance of dividend payable