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Colonial Furniture's net profits before taxes for 2019 totaled $354,000. The company's total retained earnings were $338,000 for 2018 year-end and $389,000 for 2019 year-end. Colonial is subject to a 21 percent tax rate. What was the cash dividend declared by Colonial Furniture in 2019?

Respuesta :

Answer:

$228,660

Explanation:

The formula to compute the cash dividend declared is shown below:

As we know that

The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid

where,

The net income is

= $354,000 - 21% × $354,000

= $354,000 - $74,340

= $279,660

Now the cash dividend declared is

$389,000 = $338,000  + $279,660 - dividend paid

So, the dividend paid is  $228,660

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