If you have a partial balance sheet with retained earnings 300,000 for 2005 and 100,00 for 2004. Cash dividends of 65,000 for 05 and 50,000 for 04. And dividends payable 0 for 05 and 25,000 for 04. How do you determine net income. I know that tou subtract the retained earnings from one another and then subtract the dividends, but if it has a balance of 0 does it mean they have already been paid for the year?

And dividends payable 0 for 05.

This means that the official dividend declaration has not been made yet.