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Sammy’s Pizza opened on January 1, 2014. Sammy’s reported the following for cash revenues and cash expenses for the years 2014 to 2016: Cash Revenues Cash Expenses 2014 $ 15,000 $ 8,500 2015 $ 25,000 $ 11,500 2016 $ 35,000 $ 19,500 Assume that Sammy’s Pizza paid a $3,750 dividend to stockholders in 2015. What would Sammy’s Pizza report for net income and retained earnings for 2015 and 2016?
Expert Answer
| Please find below the answer and please give thumbs up | |||
| Statementshowing Computations | |||
| Paticulars | 2,014.00 | 2,015.00 | 2,016.00 |
| Cash revenues | 15,000.00 | 25,000.00 | 35,000.00 |
| Less Cash expenses | (8,500.00) | (11,500.00) | (19,500.00) |
| Net income | 6,500.00 | 13,500.00 | 15,500.00 |
| Dividend Paid | 3,750.00 | ||
| Addition to retained earnings | 6,500.00 | 9,750.00 | 15,500.00 |
| Retained earnings | 6,500.00 | 16,250.00 | 31,750.00 |
