Answer:
1. Dividends = NET PROFIT - Retained Earnings = $3.5 billion
2. Net Profit = Dividends + Retained Earnings = $5.6 billion
3. Dividends = NET PROFIT - Retained Earnings = $0
4. Ending Retained Earnings = Beginning Retained Earnings - Net loss - dividends. -1.68 - 0.98 - 0 = - $2.66 billion
5. Therefore Beginning Retained Earnings = 1.52-0.41+0.04 = $1.15 billion.
Step-by-step explanation:
The equation is: NET PROFIT- DIVIDENDS = RETAINED PROFITS
Therefore:
1. A company reports an increase in retained earnings of $3.0 billion and net income of $6.5 billion. What is the amount of dividends?
Dividends = NET PROFIT - Retained Earnings = $3.5 billion
2. A company reports an increase in retained earnings of $3.2 billion and dividends of $2.4 billion. What is the amount of net income?
Net Profit = Dividends + Retained Earnings = $5.6 billion
3. A company reports an increase in retained earnings of $1.58 billion and net income of $1.58 billion. What is the amount of dividends?
Dividends = NET PROFIT - Retained Earnings = $0
4. A company reports beginning retained earnings of −$1.64 billion, net loss of $0.98 billion, and $0 dividends. What is the amount of ending retained earnings?
Ending Retained Earnings = Beginning Retained Earnings - Net loss - dividends. -1.68 - 0.98 - 0 = - $2.66 billion
5. A company reports ending retained earnings of $1.52 billion, net income of $0.41 billion, and dividends of $0.04 billion. What is the amount of beginning retained earnings?
Ending Retained Earnings = Beginning Retained Earnings + Net income - dividends.
1.52 = Beginning Retained Earnings + 0.41 - 0.04
Therefore Beginning Retained Earnings = 1.52-0.41+0.04 = $1.15 billion.