The net income of Hendley, Inc. for the year is $35,000. The dividends declared during the year were $43,000. Which of the following statements is true? A. Retained Earnings account decreases by $8,000. B. Retained Earnings will remain the same. C. Retained Earnings account decreases by $35,000. D. Retained Earnings account increases by $43,000.

The net income of Hendley, Inc. for the year is $35,000. The dividends declared during the year were $43,000. Which of the following statements is true? A. Retained Earnings account decreases by $8,000. B. Retained Earnings will remain the same. C. Retained Earnings account decreases by $35,000. D. Retained Earnings account increases by $43,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The net income of Hendley, Inc. for the year is

$35,000.

The dividends declared during the year were

$43,000.

Which of the following statements is true?

Retained Earnings account decreases by

$8,000.

Retained Earnings will remain the same.

Retained Earnings account decreases by

$35,000.

Retained Earnings account increases by

$43,000.

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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