On 12/31/13, Hite Industries reported retained earnings of $525,000 on its balance sheet, and it reported that it had $135,000 of net income during the year. On its previous balance sheet, at 12/31/12, the company had reported $445,000 of retained earnings. No shares were repurchased during 2013. How much in dividends did the firm pay during 2013?

Question

Business

Dominique Crosby

10 August, 02:38

On 12/31/13, Hite Industries reported retained earnings of $525,000 on its balance sheet, and it reported that it had $135,000 of net income during the year. On its previous balance sheet, at 12/31/12, the company had reported $445,000 of retained earnings. No shares were repurchased during 2013. How much in dividends did the firm pay during 2013?

+3

Answers (1)

Know the Answer?

Zoey Burton · Answer 1

The answer is: Hite Industries paid $55,000 in dividends during 2013.

Explanation:

We can calculate how much Hite Industries paid in dividends during 2013 with the following formula:

Dividends = Net income - change in Retained Earnings

Dividends = Net income - (Retained earnings 2013 - Retained earnings 2012)

Dividends = $135,000 - ($525,000 - $445,000)

Dividends = $135,000 - $80,000

Dividends = $55,000