Use the information below for Barton Shipping Corp.for 2016 and 2017 to answer the following question. $\begin{array}{lr}
\text { Retained earnings, December } 31,2016 & \$ 300,000 \
\text { Retained earnings, December } 31,2017 & 345,000 \
\text { Dividends payable, December } 31,2016 & 19,000 \
\text { Dividends payable, December } 31,2017 & 29,000 \
\text { Net income-2017 } & 150,000
\end{array}$ How much cash did Barton Shipping pay for dividends during 2017?
A) $95,000
B) $105,000
C) $115,000
D) $140,000

Question

Quizplus · Accepted Answer

The change in retained earnings from 2016 to 2017 is $45,000 ($345,000 - $300,000). With a net income of $150,000, the dividends declared in 2017 are $105,000 ($150,000 - $45,000). The cash paid for dividends is the dividends declared plus the change in dividends payable: $105,000 + ($19,000 - $29,000) = $95,000.

Use the Information Below for Barton Shipping Corp How Much Cash Did Barton Shipping Pay for Dividends During