Colfax Corporation had a Retained Earnings balance on January 1, 2009, of $720,000; declared cash dividends during 2009 in the amount of $123,000, of which $30,000 were not paid until 2010; and reported an ending balance of Retained Earnings of $1,020,000. Based on these facts alone, net income for 2009 for Colfax Corporation must have been

Question

Quizplus · Accepted Answer

The net income for 2009 can be calculated by taking the ending retained earnings, adding back the dividends declared, and subtracting the beginning retained earnings. Thus, $1,020,000 (ending retained earnings) + $123,000 (dividends declared) - $720,000 (beginning retained earnings) = $423,000.

Colfax Corporation Had a Retained Earnings Balance on January 1