Respuesta :
Answer:
$10 million
Explanation:
net income = $25 million
Year end retained earnings balance = $405 million
Opening retained earnings balance = $390 million
Total dividends paid to shareholders during the most recent year = ?
Retained earnings is the accumulation of the entity's net income over the years. The balance in the retained earnings account reduces when dividends are paid.
Opening retained earnings + net income - dividend paid = closing retained earnings
$390 million + $25 million - dividend paid = $405 million
$390 million + $25 million - $405 million = dividend paid
dividend paid = $10 million
The total dividends paid to shareholders during the most recent year amounts to $10 million.
Answer:
Total dividends paid out equals = $10 million
Explanation:
Dividends represent the proportion of profits paid out as return to ordinary shareholders for their ownership stake -ordinary share capital- in the business.
Retained earnings is the balance of the profit after the payment of dividends. Retained earnings serves as internal source of finance for company to fund the acquisition of non-current assets and working capital.
The balance in the retained earnings account at the end of the accounting period is computed as follows:
$
Balance at the beginning xxx
add net income made in the current period xxx
less Dividend paid (xxx)
Balance at the end xxx
So we can apply this to the question;
$
Balance at the beginning 390
add net income made in the current period 25
less Dividend paid ( y )
Balance at the end 405
Dividends is missing, so we represent it with " y"
390 + 25 -y = 405
390 + 25 - 405 = y
10= y.
Total dividends paid out equals = $10 million
