Question

Over the first four years of a company's life, it earned the following net income (loss):______.

Answer 1

Answer:

$700

Explanation:

The computation of the average dividend amount paid is as follows:

Total net income for first four years is

= $6,000 + $4,000 + $7,000 - $3,000

= $14,000

And, the ending retained earning balance after 4 years is $11,200

So, the dividend payment would be

= $14,000 - $11,200

= $2,800

For per year it would be

= $2,800 ÷ 4 years

= $700