Select balance sheet data for Caesar, Inc. is presented below:
Caesar paid $1,000 in dividends during this period. What is the net income for April?
A) $9,000
B) $116,000
C) $36,000
D) Cannot be determined from the information given.
C) $36,000
Explanation: multiple step process – using accounting equation, determine beginning and ending retained earnings, then complete statement of RE to solve for net income:
Step 1) beginning RE: $116,000 = $41,000 + $9,000 + X; beginning RE = $66,000
Step 2) ending RE: $198,000 = $88,000 + $9,000 + X; ending RE = $101,000
Step 3) beginning RE $66,000 + net income - $1,000 dividends = ending RE $101,000
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