Question

Required: Below are approximate amounts related to retained earnings reported by five companies in previous years. 1. A company reports an increase in retained earnings of $1.3 billion and net income of $3.1 billion. What is the amount of dividends? 2. A company reports an increase in retained earnings of $1.5 billion and dividends of $0.7 billion. What is the amount of net income? 3. A company reports an increase in retained earnings of $1.41 billion and net income of $1.41 billion. What is the amount of dividends? 4. A company reports beginning retained earnings of -$1.98 billion, net loss of $0.81 billion, and $0 dividends. What is the amount of ending retained earnings? 5. A company reports ending retained earnings of $1.74 billion, net income of $0.24 billion, and dividends of $0.06 billion. What is the amount of beginning retained earnings? (Enter your answers in billions rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.) $ Dividends Net income 3. Dividends 4. Ending Retained Earnings 5. Beginning Retained Earnings 1.80 billion billion billion billion billion

Answer 1

Answer:

1	Dividends	$1.80	billion
2	Net income	$2.20	billion
3	Dividends	$0.00	billion
4	Ending Retained earnings	($2.79)	billion
5	Beginning Retained earnings	$1.56	billion

Calculations:

1
	Net income	$3.10	billion
	(less): Increase in retained earnings	($1.30)	billion
	Dividends	$1.80	billion
2
	Increase in retained earnings	$1.50	billion
	Add: Dividends	$0.70	billion
	Net income	$2.20	billion
3
	Net income	$1.41	billion
	(less): Increase in retained earnings	($1.41)	billion
	Dividends	$0.00	billion
4
	Beginning retained earnings	($1.98)	billion
	Less: Net loss	($0.81)	billion
	Less: Dividends	$0.00	billion
	Ending retained earnings	($2.79)	billion
5
	Ending retained earnings	$1.74	billion
	Less:Net income	($0.24)	billion
	Add:Dividends	$0.06	billion
	Beginning retained earnings	$1.56	billion