On 12/31/2020, Heaton Industries Inc. reported retained earnings of $425,000 on its balance sheet, and it reported that it had $172,500 of net income during the year. On its previous balance sheet, at 12/31/2019, the company had reported $555,000 of retained earnings. No shares were repurchased during 2020. How much in dividends did Heaton pay during 2020? Select the correct answer. a. $302,442 b. $302,269 c. $302,327 d. $302,384

Question

Business

Sonia West

13 February, 00:13

On 12/31/2020, Heaton Industries Inc. reported retained earnings of $425,000 on its balance sheet, and it reported that it had $172,500 of net income during the year. On its previous balance sheet, at 12/31/2019, the company had reported $555,000 of retained earnings. No shares were repurchased during 2020. How much in dividends did Heaton pay during 2020? Select the correct answer. a. $302,442 b. $302,269 c. $302,327 d. $302,384

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Chief · Answer 1

The amount of dividend paid by Heaton: $

Retained profit as at 31/12/2019 555,000

Add: Net income for the year 172,500

727,500

Less: Retained earnings as at 31/12/2020 425,000

Dividend paid in 2020 302,500

The amount of dividend paid in 2020 is $302,500, which is close to $382,442.

The correct answer is A

Explanation:

The dividend paid in 2020 equals the retained earnings at the end of 2019 plus the net income for the year minus the retained earnings at the end of 2020.