Question

Boston Recyclers Company uses the indirect method to prepare its statement of cash flows. Refer to the following information for​ 2019:

1. Retained​ Earnings, beginning​ balance, $139,000
2. Retained​ Earnings, ending​ balance, $120,000
3. There is a net loss of​ $15,000 for the year.
What is the amount of dividends declared during the​ year?

Answer 1

$4,000

Step-by-step explanation:

We will use the formulae below to get the amount of dividend the declared during the year

Ending retained earnings = Beginning retained earnings - Net loss - Dividends declared

$120,000 = $139,000 - $15,000 - Dividends declared

$120,000 = $124,000 - Dividend declared

Dividend declared = $124,000 - $120,000

Dividend declared = $4,000