The ending Retained Earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year.The company declared a dividend of $1.3 million during the year.What was the net income earned during the year?

Question

Quizplus · Accepted Answer

The increase in Retained Earnings was $3.2 million, which means the company had a net income of $3.2 million (since Retained Earnings represents the accumulation of net income over time). However, the company also declared a dividend of $1.3 million, which means this amount needs to be subtracted from the net income to arrive at the final answer: $3.2 million - $1.3 million = $1.9 million. Therefore, the correct choice is C.

The Ending Retained Earnings Balance of Juan's Mexican Restaurant Chain