Net Income and Statement of Retained Earnings A summary of the operations of Quincy Company for the year ended May 31, 2009, is shown below.

Required:
1. Determine the net income for the year by preparing an income statement. (There are 8,000 shares of stock outstanding.)
2. Prepare a statement of retained earnings for the year ended May 31, 2009.
3. Prepare a statement of retained earnings assuming that Quincy had a net loss for the year of $38,000.
4. Interpretive Question: Assuming a loss as in (3), is it a good idea for Quincy to still pay its shareholders dividends?

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Advertising expense Supplies expense Rent expense Salaries expense.. Miscellaneous expense Dividends $ 4,650 38,410 2,400 25,340 10,200 19,500 Retained earnings (6/1/08) 175,670 Income taxes... 20,760 Consulting fees (revenues) 176,400 Administrative expense 13,900