Question

​norris company declared cash dividends of $60,000 during the year. cash dividends payable were $20,000 at the beginning of the year and $25,000 at the end of the year. the amount of cash norris co. used for payment of dividends during the year was

Answer 1

The amount of cash dividends paid during the year would be $20,000 plus $25,000 = $45,000 which would fall within the $60,000 dividends received during the year so would be covered by that revenue and mean the stockholders would definitley receive their dividends.

Answer 2

To find the amount of cash Norris Company used for payment of dividends take the cash dividends payable of $20,000 from the beginning of the year and add them to the amount at the end of the year $25,000.

$25,000 + $20,000 = $55,000

$55,000 is the amount of cash that Norris Company used. Dividends payable are the amount of dividends that are to be paid to its shareholders. Every time they are paid, the cash amount paid is recorded as a dividend payable.