At the beginning of the year, paid-in capital was $164 and retained earnings was $94. During the year, the stockholders invested $48 and dividends of $12 were declared and paid. Retained earnings at the end of the year were $104.Net income for the year was:Multiple Choice$40.$20.$30.$22.
Question
At the beginning of the year, paid-in capital was 94. During the year, the stockholders invested 12 were declared and paid. Retained earnings at the end of the year were 40.30.$22.
Solution
To calculate the net income for the year, we need to understand that retained earnings are affected by net income and dividends.
Here's the step-by-step calculation:
- Start with the beginning retained earnings which is $94.
- Add the end of the year retained earnings which is $104.
- Subtract the dividends paid during the year which is $12.
So, the calculation would be: 104 (end of the year retained earnings) - 186.
Therefore, the net income for the year is 94 (beginning retained earnings) = $92.
However, this option is not available in the multiple choices provided. There might be a mistake in the question or the provided choices.
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