Ivan's, Inc., paid $478 in dividends and $584 in interest this past year. Common stock increased...

Ivan's, Inc., paid $478 in dividends and $584 in interest this past year. Common stock increased by $194 and retained earnings decreased by $120. What is the net income for the year?

Expert Solution

Net Income $ 358

Working:

Dividend paid			$ 478
Less:Decrease in retained earning			$ 120

Net Income for the year			$ 358

Alternatively,

Suppose Net Income "x" and beginning retained earning "y"

Beginning Retained Earning	y
Add:Net Income	x
Less:Dividend	478
Ending retained Earning	y+x-478

Further,
retained earning decreased by $ 120
so,
Beginning retained earning-Ending Retained earning				=	120
	or,
		y-(y+x-478)		=	120
	or,
		y-y-x+478		=	120
	or,
		-x+478		=	120
	or,
		-x		=	120-478
	or,
		-x		=	-358
	or,
		x		=	$ 358

jeff jeffy answered 3 years ago

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