Question 15 2 points Save Answer beginning total of s4o and

Question 15 2 points Save Answer beginning total of s4o and an ending total of $50 if $10 of dividends were paid period, net income must have been B.54 C. $10 O $30

Solution

The answer is A.

Therefore net income is $20.

Working:
Beginning balance of retained ernings	(A)	$40
Net inome	(B)	X
Dividends paid	(C)	$10
Ending balance	(D)	$50
The formula is
Ending balance = Beginning balance + Net income - Dividends paid
D = A+B - C ,         or 50 = 40 + X - 10,             or X = 50 + 10 - 40 = 20
Therefore net income is $20.