Question

Now Inc. released its annual results and financial statement. Grace is reading the summary in the business pages of today's paper. In its annual report this year, NOW Inc. reported a net income of $152 million. Last year, the company reported a retained earnings balance of $459 million, whereas this year it increased to $540 million. How much was paid out in dividends this year?a. $4 millionb. $360 millionc. $71 milliond. $233 million

Answer 1

Answer:

Option (c) is correct.

Explanation:

Given that,

Retained earnings in the last year = $459 million

Net income in this year = $152 million

Retained earnings in this year = $540 million

Dividends paid this year:

= (Retained earnings in the last year + Net income in this year) - Retained earnings in this year

= ($459 million + $152 million) - $540 million

= $71 million

Therefore, the company paid out $71 million in dividends this year.