What is net income under the following scenario? Post your answer in this thread

Question

What is net income under the following scenario? Post your answer in this thread. • Retained earnings at the end of 2009 were $700,000, but retained earnings at the end of 2010 had declined to $320,000. • The company does not pay dividends. • The company’s depreciation expense is its only noncash expense; it has no amortization charges. • The company has no noncash revenues. • The company’s net cash flow (NCF) for 2010 was $150,000. Post your answer in this this thread. Your response will count as one of your weekly discussion postings. To receive credit for this discussion posting, you must provide your calculations. You are encouraged to respond to all practice problems throughout the week. However, if you post a response for multiple practice problems, you will receive credit for only one discussion posting.

Explanation / Answer

Closing Retained Earnings= Opening Retained Earnings+ Net Income- Dividends 320000= 700000+ Net Income-0 Net Income 320000-700000 Net Income -380000 There is net loss of $ 380000

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