Question

On 12/31/10, Heaton Industries Inc. reported retained earnings of $675,000 on its balance sheet, and it reported that it had $172,500 of net income during the year. On its previous balance sheet, at 12/31/09, the company had reported $555,000 of retained earnings. No shares were repurchased during 2010. How much in dividends did Heaton pay during 2010?

Answer 1

Answer:

$ 52,500

Explanation:

Given data:

Total reported retained earnings in 2010= $ 675,000

Net income during the year = $ 172,500

Net retained earning of the previous year i.e 2009 = $ 555,000

now,

Dividends paid by the Heaton during 2010 = ( The retained earnings of the year 2009) - ( the retained earnings of 2010 ) + ( the net income of 2010 )

on substituting the values, we get

Dividends paid by the Heaton during 2010 = $ 555,000 - $ 675,000 + $ 172,500 = $ 52,500

Hence, the dividends paid during 2010 was $ 52,500