Question

Elder, Assuming the only changes in retained earnings in 2011 were for net income and a $50,000 dividend, what was net income for 2011

A) $50,000
B) $100,000
C) $150,000
D) $200,000

Answer 1

To calculate the net income for 2011 based on changes in retained earnings and a known dividend, additional information such as the retained earnings beginning and ending balances is required.

Step-by-step explanation:

The question pertains to a scenario wherein the retained earnings of a company change only due to net income and a dividend payment.

Retained earnings is the portion of net income which is retained by the company rather than distributed to its shareholders as dividends.

To calculate the net income for 2011, assuming there are no other changes to retained earnings except the net income itself and a dividend payment, one would need additional information such as the beginning and ending balances of retained earnings.

Without this information, we cannot determine the net income solely based on the dividend amount.

To calculate the net income for 2011, we need to consider the changes in retained earnings. Net income is calculated by subtracting dividends from the change in retained earnings.

In this case, the only change in retained earnings in 2011 was a $50,000 dividend. Therefore, the net income for 2011 would be $50,000.