Question

Ivan's, Inc., paid $482 in dividends and $586 in interest this past year. Common stock increased by $196 and retained earnings decreased by $122. What is the net income for the year

Answer 1

$360

Step-by-step explanation:

We can compute net income to be

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

Where,

Dividend = $482

Change in retained earnings = $122

Hence,

Net income = Dividend - Change in retained earnings

= $482 - $122

Net income = $360