Willie Company's retained earnings increased $20,000 during 2016. What was Willie's 2016 net income or loss given that Willie declared $25,000 of dividends during 2016?

45000

The correct answer is $45,000

Explanation:

Willie Company's during the 2016 year:

Willie Company's retained earnings increased $20,000 during 2016 Willie declared $25,000 of dividends during 2016

In order to know the net income, is necessary to sum the retained earnings and the declared dividends.

$20,000 (retained earnings) + $25,000 (declared dividends) = $45,000 net income

Willie's 2016 net income was $45,000