Superior has provided the following information for its recent year of operation:

The common stock account balance at the beginning of the year was $20,000 and the year-end balance was $25,000.

The additional paid-in capital account balance increased $2,500 during the year.

The retained earnings balance at the beginning of the year was $75,000 and the year-end balance was $91,000.

Net income was $26,000.

How much were Superior's dividend declarations during its recent year of operation?

A. $10,000.

B. $42,000.

C. $26,000.

D. The dividend declarations can not be determined given the above information.

Question

Business

Shuttershy

24 December, 19:32

Superior has provided the following information for its recent year of operation:

The common stock account balance at the beginning of the year was $20,000 and the year-end balance was $25,000.

The additional paid-in capital account balance increased $2,500 during the year.

The retained earnings balance at the beginning of the year was $75,000 and the year-end balance was $91,000.

Net income was $26,000.

How much were Superior's dividend declarations during its recent year of operation?

A. $10,000.

B. $42,000.

C. $26,000.

D. The dividend declarations can not be determined given the above information.

+1

Answers (1)

Know the Answer?

Valentin Sellers · Answer 1

Option (a) is correct.

Explanation:

Given that,

Beginning balance of Retained Earnings = $75,000

Net income = $26,000

Ending retained earnings = $91,000

Total Balance during the year:

= Beginning balance of Retained Earnings + Net income

= $75,000 + $26,000

= $101,000

Dividend declared:

= Total Balance during the year - Ending retained earnings

= $101,000 - $91,000

= $10,000

Therefore, the amount of dividend declared by the Superior during its recent year of operation is $10,000.