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12 December, 09:37

A company's retained earnings increased $375,000 last year and its assets increased $973,000. The company declared a $79,000 cash dividend during the year. What was last year's net income?

A. $296,000.

B. $375,000.

C. $454,000.

D. $519,000.

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Answers (1)
  1. 12 December, 10:18
    0
    C. $454,000.

    Explanation:

    We know that

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

    $375,000 = $0 + net income - $79,000

    So, the net income would be

    = $375,000 + $79,000

    = $454,000

    The ending balance of retained earnings - Opening balance of retained earnings is also known as increase in retained earning
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