Davis Construction Inc

Davis Construction Inc.
Davis Construction began operation on January 1, 2012, with an initial investment of $100,000 from each of its three stockholders. During the year ending 2012 Davis Construction had net income of $125,000 and paid dividends of $50,000.
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Refer to the information provided for Davis Construction, Inc. The dividends for the year:

A) increases the amount of capital stock reported by the company.
B) are part of Davis Construction's operating expense.
C) are reported on the statement of retained earnings.
D) are reported on the income statement.