Question

The statement of stockholders' equity for Jutras Corporation shows an increase in the Common Stock account of $8,000, an increase in Additional Paid-in Capital--Common in the amount of $22,000, and an increase in Retained Earnings of $50,000. If the stock has a par value of $3 and dividends of $10,000 were declared and paid during the year, what is the amount of net income for the year?

Answer 1

$60,000

Step-by-step explanation:

We know that

The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid

$50,000 = net income - $10,000

So, the net income would be

= $50,000 + $10,000

= $60,000

The ending balance of retained earning - Beginning balance of retained earnings reflects the increase balance of retained earnings