Company Financial Data Analysis

What is the net income for 2019?

A. $ 14,000

B. $ 5,000

C. $ 9,000

D. $ 23,000

Final answer:

The net income for 2019 is calculated by adding the dividends to the change in retained earnings. With an ending retained earnings of $77,000, a beginning of $68,000, and dividends of $14,000, the net income is $23,000, which is option D.

Explanation:

To find the net income for 2019, we need to analyze the changes in Retained Earnings. The formula to calculate net income (NI) considering dividends paid is as follows:

Net Income = Ending Retained Earnings - Beginning Retained Earnings + Dividends

Substituting the given values:

  • Ending Retained Earnings (12/31/2019): $77,000
  • Beginning Retained Earnings (12/31/2018): $68,000
  • Dividends Declared and Paid in 2019: $14,000

We get:

NI = $77,000 - $68,000 + $14,000 = $9,000 + $14,000 = $23,000

Therefore, the net income for 2019 is $23,000, which corresponds to option D.

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