The changes in account balances for Allen Inc. for 2009 are as follows: Assuming the only changes in retained earnings in 2009 were for net income and a $25,000 dividend, what was net income for 2009?
A)$30,000
B)$20,000
C)$15,000
D)$ 5,000

Question

Quizplus · Accepted Answer

The net income can be calculated by adding the dividend to the change in retained earnings. If the only changes in retained earnings were due to net income and a $25,000 dividend, then net income must have been $30,000 to account for the dividend and any increase in retained earnings.

The Changes in Account Balances for Allen Inc