Question

The ending Retained Earnings balance of Boomer Inc. decreased by $1.5 million from the beginning of the year. The company declared a dividend of $4.2 million during the year. What was the net income for the year?

Answer 1

Answer:

net income is 2.7 million

Explanation:

given data

beginning of year decrease = $1.5 million

dividend = $4.2 million

to find out

net income

solution

we know that here relation that is

net income + Beginning retained earning - dividend = Ending retained earning

so here Beginning retained earning - Ending retained earning = $1.5 million

so

Beginning retained earning - Ending retained earning = dividend - net income

put here value so net income will be

1.5 = 4.2 - net income

net income = 4.2 - 1.5 = 2.7

net income is 2.7 million