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Ponzi Corporation reported the following information for the year ended 30 June 2020.
Profit $100 000
Dividends 6 000
Retained earnings at 30 June 2020 $120 000
Question 1: What was the economic effect of the payment of Ponzi's dividends?
Option A. The dividends must be paid whenever Ponzi Corp. reports profit
Option B. The dividend should be added to profit if the company's accounting equation is in balance
Option C. The dividend reduced profit for 2020
Option D. The dividend reduced total retained earnings
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