The increases in account balances of XYZ during 2014 are presented below: Assuming the only debit to retained earnings was for a dividend of $52,000,net income for 2014 was:

Question

The increases in account balances of XYZ during 2014 are presented below:  Assuming the only debit to retained earnings was for a dividend of $52,000,net income for 2014 was:

Quizplus · Accepted Answer

To calculate net income, we need to subtract the decrease in retained earnings due to dividends from the total increase in account balances.

Total increase in account balances = $176,000 + $20,000 + $28,000 + $52,000 (dividend) = $276,000

Decrease in retained earnings due to dividend = $52,000

Net income = Total increase in account balances - Decrease in retained earnings due to dividend
Net income = $276,000 - $52,000
Net income = $224,000

Therefore, the correct answer is option C, $96,000.

The Increases in Account Balances of XYZ During 2014 Are