Question

Electronics World Inc. paid out $29.7 million in total common dividends and reported $342.3 million of retained earnings at year-end. The prior year's retained earnings were $287.5 million. What was the net income? Assume that all dividends declared were actually paid. Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar, if necessary.

Answer 1

Answer:

The net income is $845,000,000

Explanation:

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

The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid

$3,423,000,000 = $2,875,000,000 + net income - $297,000,000

$3,423,000,000 = $2,578,000,000 + net income

So, the net income would be

= $3,423,000,000 - $2,578,000,000

= $845,000,000