Answer-first summary for fast verification
Answer: 900.
## Explanation The relationship between retained earnings, net income, and dividends is given by the formula: **Ending Retained Earnings = Beginning Retained Earnings + Net Income - Dividends** Given: - Beginning retained earnings = $1,500 - Ending retained earnings = $2,000 - Dividends declared and paid = $400 Rearranging the formula to solve for net income: Net Income = Ending Retained Earnings - Beginning Retained Earnings + Dividends Net Income = $2,000 - $1,500 + $400 Net Income = $500 + $400 Net Income = $900 Therefore, the correct answer is **C. 900.** **Verification:** Beginning RE: $1,500 Add: Net Income: $900 Less: Dividends: $400 Ending RE: $1,500 + $900 - $400 = $2,000 ✓
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An analyst gathers the following information (in $ thousands) about a company:
| Beginning retained earnings | 1,500 |
|---|---|
| Ending retained earnings | 2,000 |
| Dividends declared and paid | 400 |
If there are no other items affecting shareholders' equity, net income (in $ thousands) is:
A
B
C
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