Ponzi Corporation
Ponzi Corporation Reported the Following Information for the Year

Ponzi Corporation
Ponzi Corporation reported the following information for the year ended December 31, 2012.
$\begin{array}{ll}\text { Net income } & \$ 100,000 \\\text { Dividends } & 6,000 \\\text { Retained earnings at December } 31,2012 & \$ 120,000\end{array}$
- Refer to the information provided above for Ponzi Corporation. What was the economic effect of the payment of Ponzi's dividends?

A) The dividend reduced net income for 2012.
B) The dividend should be added to net income if the company's accounting equation is in balance.
C) The dividend reduced total retained earnings.
D) The dividends must be paid whenever Ponzi Corporation reports net income.