Question

The income statement for the month of February indicates a net income of $17,500. During the same period, $25,500 in cash dividends were paid. Would it be correct to say that the business incurred a net loss of $8,000 during the month

Answer 1

No it does not make a loss rather there was profit of $43,000.

Step-by-step explanation:

Net income is the profit that a business realises after expenses and other obligations has been removed from revenue.

So Net Income= Revenue - Expenses

Dividends are part of the business profit that was paid to shareholders.

Therefore

Total profit = Net income + Dividends

Total profit= 17,500+ 25,500

Total profit= $43,000