NI Calc

CFA Level I FRA
#1

Simple question, but not getting it, why are dividends added back and SHE subtracted here to get the right answer:

Calculate NI and Change in stocholder equity for Year 2

Year 1: Assets = 70K, Liab = 45K

Year 2: Assets = 82K, Liab = 5K

Also provided: Stockholder investments = 3K, NI = ?, Dividends = 6K

Correct Answer: Delta OE = 27K, NI = 5K

Thanks

#2

Change in equity doesn’t make sense to me with the info provided.

Just using the simple A = L + E equation, year 1 equity = 70 -45 = 25

year 2 equity = 82 - 5 = 77

Change in equity is 52

#3

Not that it isn’t possible, butyou have liabilities going from 45k to 5k.