On January 1, Year 2, Chavez Company had beginning balances as follows: Assets=$12,500 Liabilities=$4,500 Common Stock=$3,000 During Year 2, Chavez paid dividends to its stockholders of $2,000. Given that ending retained earnings was $6,000, what was Chavez's net income for the Year 2?
A. $2,000
B. $7,000
C. $3,000
D. $5,000
Answer: C
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Testing a solution involves trying it on a small or limited basis.
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Indicate whether the statement is true or false