Larson Company ends its recent year of operations with $3,500,000 in retained earnings. During the year Larson's net in
Posted: Sat Aug 07, 2021 7:18 am
Larson Company ends its recent year of operations with $3,500,000 in retained earnings.
During the year Larson's net income exceeded its dividend declarations by $200,000. Larson's
dividend declarations were $25,000 greater than the dividend payments.
How much was Larson Company's beginning retained earnings?
Answer: Beginning retained earnings = $3,300,000 = Ending retained earnings ($3,500,000)
minus the change in retained earnings during the year ($200,000).
The change in retained earnings during the year = Net income minus dividends declared, not
dividends paid.
Net income minus dividends declared is provided as the amount of $200,000
During the year Larson's net income exceeded its dividend declarations by $200,000. Larson's
dividend declarations were $25,000 greater than the dividend payments.
How much was Larson Company's beginning retained earnings?
Answer: Beginning retained earnings = $3,300,000 = Ending retained earnings ($3,500,000)
minus the change in retained earnings during the year ($200,000).
The change in retained earnings during the year = Net income minus dividends declared, not
dividends paid.
Net income minus dividends declared is provided as the amount of $200,000