On January 1, Year 2, Chavez Company Had Beginning Balances $\begin{array}{ll}\text { Assets } & =\$ 12,500 \\\text { Liabilities } & =\$ 4,500 \\\text { Common Stock } & =\$ 3,000\end{array}$

Multiple Choice

On January 1, Year 2, Chavez Company had beginning balances as follows: $\begin{array}{ll}\text { Assets } & =\$ 12,500 \\\text { Liabilities } & =\$ 4,500 \\\text { Common Stock } & =\$ 3,000\end{array}$
During Year 2, Chavez paid dividends to its stockholders of $2,000. Given that ending retained earnings was $6,000, what was Chavez's net income for the Year 2?

A) $3,000
B) $5,000
C) $7,000
D) $2,000