Andreas42

CFA Institute thinking that dividends paid is subtracted from net income isn’t the stupidest idea of which I’ve ever heard, but it’s close.
Dividends have nothing – nothing! – to do with the income statement.
Dividends declared are removed from retained earnings and added to dividends payable, a liability account.  (Dividends declared reduces retained earnings, but not net income; once net income hits the balance sheet, it’s not net income any more.)  When dividends are paid, dividends payable is reduced, as is cash.  Dividends paid are a cash (out)flow from financing.  Dividends declared reduce shareholders’ equity in the Statement of Changes in Equity.
So: balance sheet, statement of cash flows, statement of changes in equity.
No income statement.
Period.

Andreas42

I believe the question clearly mentions dividends paid..