Question

The C Hotel's Dividends Payable account at the beginning and end of 20X9 totaled $40,000 and $35,000, respectively. Assume that dividends declared during 20X9 totaled $65,000. The dividends paid by the C Hotel during 20X9 totaled:

1) $15,000
2) $45,000
3) $65,000
4) $70,000

Answer 1

To determine the dividends paid by the C Hotel during the year 20X9, the student needs to use the formula Dividends Paid = Dividends Declared - (End Dividends Payable - Beginning Dividends Payable), which equals $70,000. This represents option 4 in the provided choices.

Step-by-step explanation:

The student is asking about the calculation of dividends paid by the C Hotel during a given year (20X9). To find out the dividends paid during the year, you need to look at the Dividends Payable accounts at the beginning and the end of the year, and the total dividends declared during the year.

We're given that the Dividends Payable at the beginning of the year was $40,000 and at the end of the year it was $35,000. Dividends declared during the year were $65,000. The formula to calculate the dividends paid is:

Dividends Paid = Dividends Declared - (End Dividends Payable - Beginning Dividends Payable)

Therefore: Dividends Paid = $65,000 - ($35,000 - $40,000) = $65,000 - (-$5,000) = $65,000 + $5,000 = $70,000

The dividends paid by the C Hotel during 20X9 totaled $70,000, which corresponds to option 4 in the given choices.