The beginning and ending balances of retained earnings for the year were $81,000 and $94,500, respectively. If dividend payments made during the year were $8,100, determine the net income or net loss for the year.

Use a negative sign with your answer to indicate a net loss, if applicable

To determine the net income or net loss for the year, we can use the following formula related to retained earnings:

\[
\text{Ending Retained Earnings} = \text{Beginning Retained Earnings} + \text{Net Income (or Loss)} - \text{Dividends Paid}
\]

Rearranging the formula to solve for Net Income (or Loss):

\[
\text{Net Income (or Loss)} = \text{Ending Retained Earnings} - \text{Beginning Retained Earnings} + \text{Dividends Paid}
\]

Given:
- Beginning Retained Earnings = $81,000
- Ending Retained Earnings = $94,500
- Dividends Paid = $8,100

Substitute these values into the equation:

\[
\text{Net Income (or Loss)} = 94,500 - 81,000 + 8,100
\]
\[
\text{Net Income (or Loss)} = 13,500 + 8,100 = 21,600
\]

Thus, the **Net Income** for the year is **$21,600**.

Would you like more details on this calculation or have any questions?

Here are 5 related questions:
1. How do retained earnings affect a company's financial health?
2. What happens if a company consistently has net losses?
3. How do dividend payments impact retained earnings?
4. Can a company have positive retained earnings but still show a net loss?
5. What are the factors that influence a company's net income?

**Tip:** Keep track of retained earnings over multiple periods to assess long-term profitability and growth.

The beginning and ending balances of retained earnings for the year were $81,000 and $94,500, respectively. If dividend payments made during the year were $8,100, determine the net income or net loss for the year.

Learn how to calculate net income or net loss based on beginning and ending retained earnings balances and dividend payments. In this example, with a beginning retained earnings of $81,000, an ending balance of $94,500, and dividends paid of $8,100, we determine a net income of $21,600. Suitable for finance and accounting students.

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