The summarized balance sheet of Autolight Limited shows the balances of previous and current year of retained earnings Rs 25,000 and Rs 35,000. If dividend paid during the current year amounted to Rs 5,000 then profit earned during the year will be:

The correct answer is C. Rs 15,000.

Retained earnings is the portion of a company’s net income that is not paid out as dividends to shareholders. It is a component of a company’s equity, and it is reported on the balance sheet.

The dividend paid during the current year is a deduction from retained earnings. This means that the retained earnings balance at the end of the current year is equal to the retained earnings balance at the beginning of the year plus the net income for the year minus the dividend paid.

In this case, the retained earnings balance at the beginning of the year is Rs 25,000, the retained earnings balance at the end of the year is Rs 35,000, and the dividend paid during the current year is Rs 5,000. Therefore, the net income for the year is equal to Rs 35,000 – Rs 25,000 – Rs 5,000 = Rs 15,000.

Option A is incorrect because it is the amount of the dividend paid during the current year. Option B is incorrect because it is the sum of the retained earnings balances at the beginning and end of the year. Option D is incorrect because it is the sum of the retained earnings balance at the end of the year and the dividend paid during the current year.