Question

The beginning balance of retained earnings was $2500. The difference paid to stockholders was $1500. The ending balance of retained earnings is $5000. what was the net income or net loss for the period

a. net loss of $3,500
B. Net income of $4000
C. Net loss of $4,500
D. Net income of $3000

Answer 1

B. Net income of $4000

Step-by-step explanation:

Opening balance + net income- difference paid= retained earnings

OB + NI -Payments = retrained earnings

$2500 + NI - $1500= $5000

$2500 + NI = $5000 + $1500

$2500 + NI = $6500

NI= $6500- $2500

Net income = $4000