[blankman1]

I've tried to understand this question but I can't seem to figure out what exactly is it asking for.
The question ask:
Suppose net income amounts to 4300 for 2005. How much has Reitvald earned since it began operations that has not actually been distributed as dividends.

Cash is 2500
Dividends is 6600
Dividends payable is 4400

The portion where it states "Reitvald earned to dividends"
What exactly do they mean in earned?
I don't want the answers but some guidelines in helping me figure this out.

[morgaine300]

"Earned" as in their net income. i.e. the 4300 of net income for 2005 is their earnings. Part of those earnings are being paid out to the stockholders in dividends. And it's asking how much hasn't been paid out. For example, if 300 of the 4300 was paid in dividends, then 4000 of it hasn't been paid. Theoretically the net income belongs to the stockholders, but the company doesn't pay all of it out, first of all cause net income is just a number on a statement and not cash (because of the accrued basis and other reasons) and also because they need to keep money in the company to operate and grow.

However, I don't see where you have the necessary information to actually answer this, unless there is other information that you are leaving out. Like is 2005 their first year of operations? That would make a big difference. The key to figuring out something like this is the dividends payable account. When dividends are declared, it's put into the dividends payable account. When it's actually paid, it comes back out of the dividends payable. So think why there is 4400 in the payable.