Question

A firm's year-end retained earnings balances are $320,000 and $400,000, for 2014 and 2015 respectively. The firm reported net profits after taxes of $100,000 in 2015. The firm's dividend payment for 2015 is ________.

Answer 1

20000

Step-by-step explanation:

Answer 2

firm's dividend payment for 2015 is $20,000

Step-by-step explanation:

Given data

earnings balances 2014 = $320,000

earnings balances 2015 = $400,000

net profits 2015 = $100,000

to find out

firm's dividend payment for 2015

solution

we know that we have net profit and current year balance and previous year balance so we will apply here dividend formula that is

dividend = net profit - ( current year balance 2015 - previous year balance 2014 ) .........................1

so

put all value in equation 1

dividend = 100000 - ( 400000 - 320000 )

dividend = 20000

so firm's dividend payment for 2015 is $20,000