Answer:
The options are :
$77,000 $80,850 $84,893 $89,137 $93,594
The correct option is the first one ,$77,000
Explanation:
The net income can be ascertained using the ending retained earnings formula provided thus:
ending retained earnings=beginning retained earnings+net income-dividends
ending retained earnings is $187,500
beginning retained earnings is $132,250
dividends paid during the year was $21,750
By changing the subject of the formula,net income formula is derived:
net income=ending retained earnings-beginning retained earnings+dividends
net income=$187,500-$132,250+$21,750=$ 77,000.00
