In: Accounting
In year 1, Company A has the following info in its financial statements: Retained Earnings (beginning balance) of $32,000; Retained Earnings (ending balance) of $95,000; Revenue of $100,000, Expenses (including tax expense) of $30,000, and dividends declared $7,000.
What amount will be shown as Net Income in Income Statement?
$95,000
$70,000
$63,000
$77,00
Net Income = Revenue - Expenses = $100000-$30000 = $70000
Checking :
The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid
$95,000 = $32,000 + net income - $7,000
So, the net income is $70,000