Okay, I realize this may be the simplest accounting question ever, but for sone reason I can't figure out the correct answer. If you're given an amount in total revenue and an amount in total expense.. how do you find the dividend? And likewise, if you're given a dividend amount and a total expense amount.. how do you find the total revenue?

EX. 1)
DIVIDEND a.)________
TOTAL REVENUES: $215,000
TOTAL EXPENSES: $165,000

EX. 2)
DIVIDEND: $5,000
TOTAL REVENUES b.)_________
TOTAL EXPENSES: $80,000


Thanks for your reply.

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Originally Posted by X0X0mellX0X0

Okay, I realize this may be the simplest accounting question ever

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No, the simplest accounting question ever is if I have $100 in Assets and $80 in Liabilities, how much Equity do I have?

On to your problem…

Btw, for anyone who wants to know, the answer is $20 in Equity.

Quote:

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Originally Posted by X0X0mellX0X0

If you're given an amount in total revenue and an amount in total expense…how do you find the dividend? And likewise, if you're given a dividend amount and a total expense amount...how do you find the total revenue?

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Short answer. You can't.

Dividends are paid from Net Income or Retained Earnings.

However, given your question, I am going to assume that the entire Net Income amount was paid as a dividend. Because that is the only way to answer this question. But in reality, you can pay none of your net income as a dividend, 10%, 50% or, in this case, 100%

Quote:

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Originally Posted by X0X0mellX0X0

EX. 1)
DIVIDEND a.)________
TOTAL REVENUES: $215,000
TOTAL EXPENSES: $165,000

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In this case, Net Income is $215,000 - $165,000 = $50,000.

So I would think that your instructor is looking for an answer of $50,000 in dividends.

Quote:

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Originally Posted by X0X0mellX0X0

EX. 2)
DIVIDEND: $5,000
TOTAL REVENUES b.)_________
TOTAL EXPENSES: $80,000

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Revenues – Expenses = Dividends
Revenues = Dividends + Expenses
Revenues = $5,000 + $80,000
Revenues = $85,000