In the statement of stockholders' equity,the balance of Retained Earnings increased by $32,000.The company declared a dividend of $10,000 during the year.What was the net income for the year?

Question

Quizplus · Accepted Answer

The increase in Retained Earnings is equal to the net income minus any dividends declared. Therefore, net income can be calculated as follows:

Retained Earnings increase = Net income - Dividends
$32,000 = Net income - $10,000
Net income = $42,000

In the Statement of Stockholders' Equity,the Balance of Retained Earnings