Question

Intel reports retained earnings at the end of fiscal 2016 of $39,120 million and retained earnings at the end of fiscal 2015 of $43,019 million. The company reported dividends of $4,924 million and other transactions with shareholders that reduced retained earnings during the year by $2,022 million. How much net income did the firm report in fiscal 2016?

A) $2,097 million
B) $4,002 million
C) $3,898 million
D) $5,946 million

Answer 1

Intel's net income for fiscal 2016 is calculated using the change in retained earnings adjusted for dividends and other transactions with shareholders, which results in a net income of $3,047 million. None of the provided answer choices match this calculation, suggesting a potential typo in the question or answer options.

Step-by-step explanation:

To calculate the net income of Intel for fiscal 2016, we should work with the information about retained earnings and other transactions that affect this account. The change in retained earnings is determined by the net income, but also adjusted for dividends and other transactions with shareholders. To find the net income, we add the dividends and the other transactions with shareholders to the decrease in retained earnings:

Change in Retained Earnings = Retained Earnings (End of 2016) - Retained Earnings (End of 2015)

Change in Retained Earnings = $39,120 million - $43,019 million = -$3,899 million

Next, to find the net income for 2016, we need to add the dividends and other transactions that reduced retained earnings to the negative change in retained earnings:

Net Income = Change in Retained Earnings + Dividends + Other Transactions

Net Income = -$3,899 million + $4,924 million + $2,022 million

Net Income = $3,047 million

So the net income reported by Intel for fiscal 2016 is $3,047 million, which is not one of the options provided. Therefore, there may be a typo in the question or options provided.