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10 June, 14:22

Bridgewater Furniture has sales of $811,000, costs of $658,000, and interest paid of $21,800. The depreciation expense is $56,100 and the tax rate is 34 percent. At the beginning of the year, the firm had retained earnings of $318,300 and common stock of $250,000. At the end of the year, the firm has retained earnings of $322,500 and common stock of $280,000. What is the amount of the dividends paid for the year? a. $15,266 b. $19,466 c. $31,566 d. $41,066 e. $45,366

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  1. 10 June, 17:25
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    The amount of the dividends paid for the year is $45366.

    Explanation:

    Net income = sales - cost - interest - depreciation - (sales - cost - interest - depreciation) * 34%

    = $811000 - $658000 - $21800 - $56100 - ($811000 - $658000 - $21800 - $56100) * 34%

    = $75100 - (75100) * 34%

    = $75100 - $25534

    = $49566

    Dividends = Opening + Net Income - Closing

    = $318300 + $49566 - $322500

    = $45366

    Therefore, The amount of the dividends paid for the year is $45366.
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