Question

MECCS Inc. has net income of $3,492, interest expense of $172, sales of $7,290, addition to retained earnings of $1,596, selling and general expenses of $1,820, and depreciation of $990. What is the amount of dividends paid if the tax rate is 21 percent

Answer 1

Answer: $1,896‬

Step-by-step explanation:

The amount of net income that is retained is determined by the amount of dividends paid in the formula:

= Net income - Retained earnings

= 3,492 - 1,596

= $1,896‬

Taxes and expenses would have already been catered for in the Net income.