Question

McKinney Corporation had beginning retained earnings of $2,242,000 and ending retained earnings of $2,499,000. During the year they issued common stock totalling $141,000. No dividends were paid. What was their net income for the year?a) $257,000b) $116,000c) $398,000d) $323,000

Answer 1

Answer: A. $257,000.

Explanation:

Since the company did not issue dividends the formula for calculating its net income is Ending Retained Earnings minus the Beginning Retained Earnings

$2,242,000 - 2,242,000 = $257,000.