Question

In its most recent financial statements, Del-Castillo Inc. reported $55 million of net income and $840 million of retained earnings. The previous retained earnings were $825 million. How much in dividends did the firm pay to shareholders during the year? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar.

Answer 1

Difference in retained earnings

= $840,000,000- $825,000,000

= $15,000,000

Dividend paid = Net income - Difference in retained earnings

Dividend paid = $55,000,000 - $15,000,000

Dividend paid = $40,000,000

Step-by-step explanation:

In this case, there is need to determine the difference in retained earnings, which equal retained earnings at the end minus retained earnings at the beginning.

Dividend paid is calculated as net income minus difference in retained earnings.