Solving for Stockholders\' Equity Amounts Assume that the following amounts are

Question

Solving for Stockholders' Equity Amounts Assume that the following amounts are known for Colten Company for the current year: Retained Earnings, beginning balance Retained Earnings, ending balance Net income Fair value of large stock dividend declared $183,000 220,000 101,000 22,000 66,000 73,000 Dividend Payable, beginning balance Dividend Payable, ending balance 1. Assume that the only other amount that affected Retained Earnings during the year was a cash dividend that was declared. Compute the amount of the cash dividend declared during the current year. 2. Compute the amount of cash dividends actually paid in cash to stockholders during the year.

Explanation / Answer

Ans.1. Dividend Declared during the current year

Retained Earnings

Dividends declared is the balance figure = $183000+$101000-$220000 = $64000

Ans. 2

Dividens Payable

Cash dividends paid is the balance figure = $66,000+$64,000-$73,000 = $57,000

Devidends Declared $64,000 Beginning Balance $183,000 Ending Balance $220,000 Net Income $101,000 Total $284,000 Total $284,000

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