Need clarification on an answer I was given.  The problem was to find out the cost of Dividends declared. Revenue $5000 Dividends declared??? $Unkown Expenses $4000 RE 1/1 $8000 RE 12/31 $6000 I was givent this equation on how to solve and find the unknown Dividends declared. DD=RE 1/1+Revenue-Expenses-RE 12/31 DD=$8000+$5000-$4000-$3000 DD=$6000 He or She then added this 1) RE 1/1 balance is $6000 2) RE 12/31 is $9000 3) Dividend Declared $6000 **So how did he get the new amounts for REs?***

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.17E: Profitability metrics The following selected data were taken from the financial statements of The...
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Need clarification on an answer I was given.  The problem was to find out the cost of Dividends declared.

Revenue $5000

Dividends declared??? $Unkown

Expenses $4000

RE 1/1 $8000

RE 12/31 $6000

I was givent this equation on how to solve and find the unknown Dividends declared.

DD=RE 1/1+Revenue-Expenses-RE 12/31

DD=$8000+$5000-$4000-$3000

DD=$6000

He or She then added this

1) RE 1/1 balance is $6000

2) RE 12/31 is $9000

3) Dividend Declared $6000

**So how did he get the new amounts for REs?***

 

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