During 2014, Bascom Bakery paid out $33,525 of common dividends. It ended the year with $197,500 of retained earnings versus the prior year's retained earnings of $159,600. How much net income did the firm earn during the year

the Net Income during the year is $71,425

Explanation:

Formula: Net Income = Change in retained earnings + dividends paid

Current year Retained Earnings = $ 197,500

Less: Previous year Retained Earnings = $ 159,600

Change in retained earnings = $ 37,900

Net Income = Change in retained earnings + dividends paid

Net Income = - $37,900 + $ 33,525

So Net Income = $71,425