Question

A firm's year-end retained earnings balances are $320,000 and $400,000, for 2018 and 2019 , tespectively. The firm reported net profits after taxes of $100,000 in 2019 .The firm's dividend payment for 2019 is. A) 50 B) $20,000 C) $80,000 D) $100,000

Answer 1

The firm's dividend payment for 2019 is $80,000.

Step-by-step explanation:

To calculate the firm's dividend payment for 2019, we need to determine the change in retained earnings from the previous year. The change in retained earnings is equal to the net profits after taxes minus any dividends paid out. In this case, we are given the retained earnings balances for 2018 and 2019, which are $320,000 and $400,000 respectively. The net profits after taxes for 2019 are given as $100,000. Therefore, the dividend payment for 2019 would be the change in retained earnings: $400,000 - $320,000 = $80,000.