Question

At the beginning of its current fiscal year, Willie Corp.’s balance sheet showed assets of $11,500 and liabilities of $5,600. During the year, liabilities decreased by $1,200. Net income for the year was $3,000, and net assets at the end of the year were $6,700. There were no changes in paid-in capital during the year.

Calculate the dividends, if any, declared during the year. (Negative amounts should be indicated by a minus sign.)

Answer 1

$2,200

Step-by-step explanation:

Ending liabilities = Beginning liabilities - Decrease in liabilities

= $5,600 - $1,200

= $4,400

Ending net assets = Ending total assets - Ending Total liabilities

$6,700 = Ending total assets - $4,400

Ending total assets = $11,100

Ending retained earnings:

= Ending total assets - Ending Total liabilities

= $11,100 - $4,400

= $6,700

Dividends:

= Beginning RE + Net income - Ending RE

= $5,900 + $3,000 - $6,700

= $2,200