Question

McKinney Corporation had beginning retained earnings of $2,242,000 and ending retained earnings of $2,499,000. During the year, it issued common stock totaling $141,000 and paid dividends of $40,000. What was its net income for the year? Group of answer choices $297,000 $257,000 $347,000 $217,000 $438,000

Answer 1

Answer:

$297,000

Explanation:

In this question, we use the ending retained earning equation which is shown below:

Ending retained earning balance = Beginning retained earning balance + net income - dividends paid

$2,499,000 = $2,242,000 + net income - $40,000

$2,499,000 = $2,202,000 + net income

So, the net income = $2,499,000 - $2,202,000

                                =  $297,000

There is no use of the common shares issued in the computation part