Question

The following information pertains to Alpha Computing at the end of 2021: Assets $ 962,500 Liabilities $ 427,500 Net Income $ 280,000 Common Stock $ 305,000 Alpha Computing's Retained Earnings account had a zero balance at the beginning of 2021. What amount of dividends did the company declare in 2021? Multiple Choice $51,000 $52,000 $53,000 $50,000

Answer 1

Answer:

$50.000

Explanation:

The Total Assets must be equal to the sum of Liabilities plus Equity:

Assets = Liabilities + Equity

It means that 962.500 = 427.500 + 305.000 + 230.000

If we have a net income of 280.000, we deduct $230.000 that must be keeping in the balance sheet, we have a Dividends of $50.000.