Question

Electronics World Inc. paid out $38.1 million in total common dividends and reported $172.5 million of retained earnings at year-end. The prior year's retained earnings were $146.6 million. What was the net income? Assume that all dividends declared were actually paid. Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar, if necessary.

Answer 1

the increase in retained earnings from the prior year to the current year is:

$172,5 million - $146.6 million = $25.9 million

Step-by-step explanation:

This increase is due to two factors: net income and dividends paid. We know that dividends paid were $38.1 million. Therefore, we can calculate the net income as follows:

$25.9 million = Net Income - $38.1 million

Net Income = $25.9 million + $38.1 million

Net Income = $64 million

Therefore, Electronics World Inc.'s net income for the year was $64,000,000.