Question

The ending Retained Earnings balance of Lambert Inc. increased by $1.5 million from the beginning of the year. The company's net income earned during the year is $4.5 million. What is the amount of dividends Lambert Inc. declared and paid

Answer 1

$3.0 million

Step-by-step explanation:

The computation of amount of dividends is shown below:-

Ending balance = $1.5 million

Net income = $4.5 million

Dividend declared & paid during the Year = Net profit - dividend paid = Net earning during the year

Net profit - Dividend paid = Net earning during the year

= $4.5 million - $1.5 million

= $3.0 million

Therefore we applied the above formula.