Volt Corp.reported the following information for the year ended December 31,2017:
$\begin{array}{lr}
\text { Revenues } & \$ 50,000 \
\text { Expenses } & 20,000 \
\text { Retained earnings at December 31,2016 } & 100,000 \
\text { Retained earnings at December 31,2017 } & 105,000
\end{array}$ How much was paid out in dividends by Volt in 2017?
A)$20,000
B)$25,000
C)$30,000
D)$50,000

Question

Volt Corp.reported the following information for the year ended December 31,2017: 
$\begin{array}{lr}
\text { Revenues } & \$ 50,000 \
\text { Expenses } & 20,000 \
\text { Retained earnings at December 31,2016 } & 100,000 \
\text { Retained earnings at December 31,2017 } & 105,000
\end{array}$ How much was paid out in dividends by Volt in 2017?
A)$20,000
B)$25,000
C)$30,000
D)$50,000

Quizplus · Accepted Answer

The net income for 2017 is $30,000 ($50,000 revenues - $20,000 expenses). The change in retained earnings is $5,000 ($105,000 - $100,000). Therefore, dividends paid out are $25,000 ($30,000 net income - $5,000 increase in retained earnings).

Volt CorpReported the Following Information for the Year Ended December 31,2017