The Dauphin Company was started by a group of investors on January 1, 20X0, when the balance sheet was made up of total assets of $10,000 and total liabilities of $7,000. Partial financial data for the first year of operations is as follows: Total assets at 12/31/X0 = $20,000; Total liabilities at 12/31/X0 = $10,000; Additional investments by owners during X0 = $4,000; Cash dividends declared = $2,000. Cash dividends paid = $1,500. What was the net income for X0?

A. $5,000 B. $5,500 C. $6,000 D. $6,500 E. $8,000

Use the information. What was the retained earnings balance at 12/31/X0?

A. $2,000 B. $3,000 C. $4,000 D. $5,000 E. $6,000