Pams Crafts opened on January 1, 2016. Pams reported the following for cash revenues and cash expenses

Question:

Pam€™s Crafts opened on January 1, 2016. Pam€™s reported the following for cash revenues and cash expenses for the years 2016 to 2018:

Required
a. What would Pam€™s Crafts report for net income and retained earnings for the years 2016, 2017, and 2018?
b. Explain the difference between net income and retained earnings.
c. Assume that Pam€™s Crafts paid a $6,000 dividend to stockholders in 2017. What would Pam€™s
Crafts report for net income and retained earnings for 2017 and 2018?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...