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At the beginning of it\'s current fiscal year, Heygood Corp\'s balance sheet sho

ID: 2465292 • Letter: A

Question

At the beginning of it's current fiscal year, Heygood Corp's balance sheet showed assets of $360,000 and liabilities of $147,000. During the year, liabiliites decreased by $22,000. Net Income for the year was $27,000, and net assets at the end of the year were $215,000. There were no changes in the paid-in capital balance of $100,000 during the year.

Calculate the dividends, if any, declared during the year.

Which of the following is the correct answer?

None of the other answers

$125,000

$113,000

$25,000

$340,000

A.

None of the other answers

B.

$125,000

C.

$113,000

D.

$25,000

E.

$340,000

Explanation / Answer

Owners Equity Assets = Liabilties + Paid In capital + Retained Earnings Beginning $360,000 = $147,000 + $100,000 + $113,000 Changes -$20,000 -$22,000 $27,000 Ending $340,000 = $125,000 + $100,000 + $115,000 $25,000 Dividends Beginning Retained Earnings = ($360,000 - $147,000 - $100,000) $113,000 Ending Retained Earnings = Net assets - Paid in capital = Ending Retained Earnings = $215,000 - $100000 = 115000 Dividend = Begining RE + Net Income + ending RE Dividend = $113,000+$27000-$115,000 $25,000

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