Question

Wilton Corporation had beginning retained earnings of $724,000 and ending retained earnings of $833,000. During the year they issued common stock totaling $47,000. No dividends were paid. What was Wilton's net income for the year?

A) $109,000

B) $62,000

C) $156,000

D) $131,000

Answer 1

To calculate the net income, subtract the beginning retained earnings from the ending retained earnings and add the issued common stock. In this case, the net income is $156,000.

Step-by-step explanation:

To calculate the net income for the year, we need to use the formula:

Net income = Ending retained earnings - Beginning retained earnings + Issued common stock - Dividends

Given that the beginning retained earnings is $724,000, the ending retained earnings is $833,000, and no dividends were paid, the calculation will be:

Net income = $833,000 - $724,000 + $47,000 - $0

Net income = $156,000

The correct answer is option C) $156,000.