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17 December, 07:14

Nina Corp. had the following net income (loss) the first three years of operation: $6,700, ($1,200), and $3,800. If the Retained Earnings balance at the end of year three is $700, what was the total amount of dividends paid over these three years?

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  1. 17 December, 09:53
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    The total amount of dividends paid over these three years is $8,600

    Explanation:

    The computation of the total amount of dividend for three years is shown below:

    = Net income for first-year - net loss for the second year + net loss for the third year - ending retained earning balance

    = $6,700 - $1,200 + $3,800 - $700

    = $8,600

    As we know,

    The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid

    So, we apply the same formula to compute the dividend amount
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