Lewis Corporation reported the following information for the year ended December 31, 2016: Net income $ 10,000 Dividends 6,000 Retained earnings at December 31, 2016 25,000 What was the economic effect of the payment of Lewis' dividends?
a. The dividend reduced net income for 2016.
b. The dividend should be equal to net income if the company's accounting equation is in balance.
c. The dividends reduce total retained earnings for the year.
d. The dividends must be paid whenever Raymond Corp. reports net income.
c
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