Question

Ivan's, Inc., paid $500 in dividends and $595 in interest this past year. Common stock increased by $205 and retained earnings decreased by $131. What is the net income for the year? Select one: a. $369 b. $500 c. $595 d. $800 e. $964

Answer 1

a. $369

Step-by-step explanation:

The computation of the net income is shown below:

As we know that

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

where,

Dividend = $500

And, the change in the retained earnings = $131

So, the net income would be

= Dividend - change in the retained earnings

=$500 - $131

= $369