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8 August, 19:47

The income statement for the month of February indicates a net income of $17,500. During the same period, $25,500 in cash dividends were paid. Would it be correct to say that the business incurred a net loss of $8,000 during the month

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  1. 8 August, 22:31
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    No it does not make a loss rather there was profit of $43,000.

    Explanation:

    Net income is the profit that a business realises after expenses and other obligations has been removed from revenue.

    So Net Income = Revenue - Expenses

    Dividends are part of the business profit that was paid to shareholders.

    Therefore

    Total profit = Net income + Dividends

    Total profit = 17,500 + 25,500

    Total profit = $43,000
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