What is the net change in retained earnings

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Question 1: Sheffield Co. generates net income of $100,000 and declares and pays $30,000 in dividends during 2019. What is the net change in retained earnings (R/E) during 2019 and what is the impact of the dividend on 2019 net income?

Option 1: Increase R/E $70,000; Decrease net income $30,000

Option 2: Increase R/E $70,000; No impact on net income

Option 3: Decrease R/E $70,000; No impact on net income

Option 4: Decrease R/E $70,000; Decrease net income $30,000

Option 5: None of the above

Reference no: EM132490542

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