Shown as follows are the amounts from the stockholders' equity section of the balance sheets of Wasson Corporation for the years ended December 31, 2017 and 2018.
2018 2017
Stockholders' equity:
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000 . . . .$ 30,000
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .200,000 . . . . 180,000
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$250,000 . . . $210,000
a. Calculate the amount of additional investment that the stockholders made during 2018.
b. Assuming that the corporation declared and paid $15,000 in dividends during 2018, calculate the amount of net income earned by the corporation during 2018.
c. Explain the significance of the $200,000 balance of retained earnings at December 31, 2018.