Sammy's Pizza opened on January 1, 2018. Sammy's reported the following for cash revenues and cash expenses

Question:

Sammy's Pizza opened on January 1, 2018. Sammy's reported the following for cash revenues and cash expenses for the years 2018 to 2020:

Cash Revenues Cash Expenses

2018......................$20,000..........................$11,000

2019......................$30,000..........................$14,000

2020......................$40,000..........................$22,000

Required

a. What would Sammy's Pizza report for net income and retained earnings for the years 2018, 2019, and 2020?

b. Explain the difference between net income and retained earnings.

c. Assume that Sammy's Pizza paid a $5,000 dividend to stockholders in 2019. What would Sammy's Pizza report for net income and retained earnings for 2019 and 2020?

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...