Markete Company has 100,000 common shares outstanding and has a policy of paying a $1.20 dividend for each of these shares.Markete has an income tax rate of 40%.Its retained earnings statement for 2011 had a closing balance of $1,346,000.Assuming an opening balance of zero, dividend payments according to its usual policy and no other adjustments, Markete's 2011 net income was

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The closing balance of retained earnings is $1,346,000. The dividends paid are 100,000 shares * $1.20 = $120,000. Therefore, the net income is the closing balance plus dividends: $1,346,000 + $120,000 = $1,466,000.

Markete Company Has 100,000 Common Shares Outstanding and Has a Policy