The correct answer is 6 The Eagle Company began operations o

The correct answer is: $6 The Eagle Company began operations on January 1, 2009, with contributed capital of $50,000. The only items affecting equity in 2009 and 2010 were net income and dividends. Dividends were $4,000 in 2009 and $6,000 in 2010. Retained Earnings at 12/31/10 were $20,000. Net Income in 2010 was $9,000. Net Income in 2009 was: Select one: a. $31,000 b. $29,000 c. $19,000X d. $21,000 e. $30,000 9

Solution

Net Income in 2009 = Retained Earnings at 31.12.2010 20000 Less: Net Income in 2010 9000 Add: Dividend in 2009 4000 Dividend in 2010 6000 Net Income in 2009 = 21000