Question

Bridgewater Furniture has sales of $811,000, costs of $658,000, and interest paid of $21,800. The depreciation expense is $56,100 and the tax rate is 34 percent. At the beginning of the year, the firm had retained earnings of $318,300 and common stock of $250,000. At the end of the year, the firm has retained earnings of $322,500 and common stock of $280,000. What is the amount of the dividends paid for the year?a. $15,266 b. $19,466 c. $31,566 d. $41,066 e. $45,366

Answer 1

The amount of the dividends paid for the year is $45366.

Step-by-step explanation:

Net income = sales - cost - interest - depreciation - (sales - cost - interest - depreciation)*34%

= $811000 - $658000 - $21800 - $56100 - ($811000 - $658000 - $21800 - $56100)*34%

= $75100 - (75100)*34%

= $75100 - $25534

= $49566

Dividends = Opening + Net Income - Closing

= $318300 + $49566 - $322500

= $45366

Therefore, The amount of the dividends paid for the year is $45366.