On December 31,2015,the balance in Retained Earnings is $20,000.On December 31,2016,the balance in Retained Earnings is $19,100.During 2016,dividends of $4,000 were declared and paid.What is the amount of net income for 2016?

Question

Quizplus · Accepted Answer

The decrease in Retained Earnings from $20,000 to $19,100 is equal to the dividends paid ($4,000) plus the net income for 2016. Therefore, net income for 2016 is $19,100 - $4,000 = $15,100.

On December 31,2015,the Balance in Retained Earnings Is $20,000