Question

Electronies World inc. pald out $23.2 million in total common dividends and reported $104 million of retained earnings at yearend. The prior year's retained eamings were s8. million. What was the net income? Assume that all dividends declared were actually paid: Write out your answer completely, For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar, if necessary.

Answer 1

To calculate the net income for Electronics World Inc., the retained earnings at the end of the year are subtracted from those at the beginning of the year, and then the dividends paid are added back in. The calculation results in a net income of $29,200,000.

Step-by-step explanation:

The student's question revolves around calculating the net income for Electronics World Inc. after knowing the common dividends paid and the retained earnings at both the start and end of the year. To calculate net income, we have to take the retained earnings at year-end, subtract the retained earnings at the start of the year, and then add the dividends paid out. The formula looks like this: Net Income = End Retained Earnings - Start Retained Earnings + Dividends Paid.

Using the given figures: Net Income = $104,000,000 - $98,000,000 + $23,200,000 = $29,200,000. Thus, the net income for Electronics World Inc. is $29,200,000.