Statement of Retained Earnings Bike and Hike,Inc.started the year with a balance of retained earnings of $100 million and ended the year with retained earnings of $128 million.The company paid dividends of $9 million to the preferred stock holders and $22 million to common stock holders.What was Bike and Hike's net income for the year?
A)$28 million
B)$31 million
C)$59 million
D)$128 million

Question

Quizplus · Accepted Answer

The change in retained earnings is $28 million ($128 million - $100 million). Adding back the dividends paid ($9 million + $22 million = $31 million) gives a net income of $59 million.