Use the following financial statements for your company to calculate the amount

Question

Use the following financial statements for your company to calculate the amount dividends paid for 2016? Income Statement Balance Sheet Year Ended 12/31/2016 12/31/201612/31/2015 Sales $50,00 Current Asset Gross Fixed Asset Less Accumulated $1,300,00 $45 ost of Goods Sold 750,00 880,00 650 350 350 $395,00 200,00 epreciation Expense100,00 250,00 50,00 200,00 80,00 $120,0 Depreciatio Fixed Asset Total Asset 450,00 430,0 $480,00 perating Expenses BIT nterest Expense BT Current Liabilities$35,0 $50,000 270,000 5,000 70,000 Long-term Debt 330,0 axes et Income Common Sto etained Earnings 110,00 otal Liabilities & Equity $480,0 S395

Explanation / Answer

Part of Net Income which is not paid out as dividends, moves into the retained earnings component of balance sheet.

Therefore,

Change in Retained Earnings = Net Income - Dividends

110,000 - 70,000 = 120,000 - Dividends

Dividends = 120,000 - 40,000

Dividends = 80,000

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