1. The following information appears on the balance sheet of Barrel Corporation at year-end:

Accounts receivable $ 11,500

Accounts payable 5,500

Supplies 4,500

Cash 4,000

Equipment 79,000

Capital stock 50,000

If the beginning of year balance in retained earnings is $25,000 and $5,000 in dividends are paid during the year, net income for the year was:

1. $23,500
2. $28,500
3. $29,000
4. $24,000