The income statement for the month of February indicates a net income of $17,500. During the same period, $25,500 in cash dividends were paid. Would it be correct to say that the business incurred a net loss of $8,000 during the month

Question

Cristopher Mcgee

Business

3 March, 14:46

The income statement for the month of February indicates a net income of $17,500. During the same period, $25,500 in cash dividends were paid. Would it be correct to say that the business incurred a net loss of $8,000 during the month

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Janelle · Answer 1

No it does not make a loss rather there was profit of $43,000.

Explanation:

Net income is the profit that a business realises after expenses and other obligations has been removed from revenue.

So Net Income = Revenue - Expenses

Dividends are part of the business profit that was paid to shareholders.

Therefore

Total profit = Net income + Dividends

Total profit = 17,500 + 25,500

Total profit = $43,000