A company reports the following balances: 12/31/2018 12/31/2019 Common Stock $ 14 comma 000 $ 162 comma 000 Paidminusin Capital in Excess of Par 98 comma 000 110 comma 000 Retained Earnings 68 comma 000 77 comma 000 During 2019, dividends of $ 14 comma 000 were declared and paid. What is net income for 2019? A. $ 14 comma 000 B. $ 5 comma 000 C. $ 9 comma 000 D. $ 23 comma 000

Question

Business

Coconut

14 August, 05:37

A company reports the following balances: 12/31/2018 12/31/2019 Common Stock $ 14 comma 000 $ 162 comma 000 Paidminusin Capital in Excess of Par 98 comma 000 110 comma 000 Retained Earnings 68 comma 000 77 comma 000 During 2019, dividends of $ 14 comma 000 were declared and paid. What is net income for 2019? A. $ 14 comma 000 B. $ 5 comma 000 C. $ 9 comma 000 D. $ 23 comma 000

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Nugget · Answer 1

D. $ 23 comma 000

Explanation:

The computation of the net income is shown below:

As we know that

The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid

$77,000 = $68,000 + net income - $14,000

$77,000 = $54,000 + net income

So, the net income is $23,000

We simply applied the above formula so that the net income could be come