Answer Happy

Willie Company's retained earnings increased $20,000 during the current year. What was
Willie's current year net income or loss given that Willie declared $25,000 of dividends during
this year?


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41) Willie Company's retained earnings increased $20,000 during the current year. What was
Willie's current year net income or loss given that Willie declared $25,000 of dividends during
this year?
A) Net income was $5,000.
B) Net income was $45,000.
C) Net loss was $45,000.
D) Net loss was $5,000.
Answer: B
Explanation: Net income is equal to $45,000, calculated as the increase in retained earnings,
$20,000, plus dividends of $25,000.