At the start of the year a company reported an opening  balance of $250,000 in the Statement of Retained Earnings. The company reported net income of $70,000 in the Income Statement for the period and an ending balance for Retained Earnings of $230,000.  Compute the amount of  dividends paid to stockholders in the year. Group of answer choices $ 90,000 $ 320,000 $ 50,000 $ 60,000

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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At the start of the year a company reported an opening  balance of $250,000 in the Statement of Retained Earnings. The company reported net income of $70,000 in the Income Statement for the period and an ending balance for Retained Earnings of $230,000.  Compute the amount of  dividends paid to stockholders in the year.

Group of answer choices
$ 90,000
$ 320,000
$ 50,000
$ 60,000
Expert Solution
Step 1 Overview

The statement of retained earnings (retained earnings statement) is a financial statement that outlines the changes in retained earnings for a company over a specified period. This statement reconciles the beginning and ending retained earnings for the period, using information such as net income from the other financial statements and amounts distributed to stockholders in the form of dividends. It is used by analysts to understand how corporate profits are utilized.

Format of Statement of Retained Earnings

Particulars Amount ($)
Retained Earnings at the Beginning of the Accounting Period XXX
Add: Net Income earned during the Accounting Period XXX
OR  
Less: Net Loss incurred during the Accounting Period (XXX)
Sub-Total XXX
Less: Dividends (or Withdrawals) during the Accounting Period (XXX)
= Retained Earnings at the End of the Accounting Period XXX

 

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