During 2011, 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?
A) $71,425
B) $74,996
C) $78,746
D) $82,683
E) $86,818

Question

Quizplus · Accepted Answer

The net income can be calculated using the formula: Net Income = (Ending Retained Earnings - Beginning Retained Earnings) + Dividends Paid. So, Net Income = ($197,500 - $159,600) + $33,525 = $37,900 + $33,525 = $71,425.

During 2011, Bascom Bakery Paid Out $33,525 of Common Dividends