Question

The ending Retained Earnings balance of Lambert Inc. increased by $2.6 million from the beginning of the year. The company's net income earned during the year is $7.8 million. What is the amount of dividends Lambert Inc. declared and paid?

Answer 1

$5.2 million

Step-by-step explanation:

Opening retained earnings + net income earned - dividend paid = Closing retained earnings

Given;

• the ending Retained Earnings balance of Lambert Inc. increased by $2.6 million from the beginning of the year
• net income earned during the year is $7.8 million

Therefore,

Dividend paid = -$ 2.6 million + $7.8 million

= $5.2 million

The amount of dividends Lambert Inc. declared and paid is $5.2 million.