Dividends paid to shareholders can be determined by analyzing the relationship between net income and retained earnings. Net income represents the total earnings generated during the period, while retained earnings show the portion of net income that is reinvested in the company rather than distributed to shareholders. The basic relationship is:

Net Income = Dividends Paid + Increase in Retained Earnings.

In this case, net income is $50,000 and retained earnings increased by $30,000. Therefore, dividends paid must be the remaining portion of earnings:

$50,000 − $30,000 = $20,000.

The change in total assets is not directly relevant for calculating dividends, as asset growth can be financed through retained earnings, debt, or equity issuance. From a financial management perspective, this calculation helps analysts assess dividend policy, payout ratios, and the firm’s balance between returning cash to shareholders and reinvesting in growth. Option A correctly identifies the dividends paid based on standard accounting relationships used in financial statement analysis.