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4 January, 11:09

Suppose for a particular year a firm had comprehensive income of $9,000, a beginning book value of equity of $76,000, and an ending book value of equity of $77,000. Using the clean surplus accounting relation, how much were the firm's dividends that year?

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  1. 4 January, 14:56
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    B. $8000

    Explanation:

    Given that

    Income = $9000

    Beginning book value = 76000

    Ending book value = 77000

    Dividends = Income + beginning book value of equity - ending book value of equity.

    Therefore,

    Dividends = 9000 + 76000 - 77000

    = 85000 - 77000

    = $8000

    Thus, dividends for the following year given the following data is = $8000
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