Question

Golden Enterprises started the year with the following: Assets $111,000; Liabilities $39,000;Common Stock $69,000; Retained Earnings $3,000.During the year, the company earned revenue of $5,900, all of which was received in cash, and incurred expenses of $3,450, all of which were unpaid as of the end of the year. In addition, the company paid dividends of $1,900 to owners. Assume no other activities occurred during the year.What was the amount of net income for the year?A. $2,450B. $5,900C. $3,450D. $1,900

Answer 1

Answer: The answer is C $3,450

Explanation:

Journal entry

Dr Cr

$ $

Asset. 111,000

Common Stock. 69,000

Revenue 5,000

Less: Expenses (3,450)

----------------

1,550

Retained earning 3,000

Liabilities 39,000

Dividend 1,900

Balance c/d 3,450

------------------ ---------------------

114,450 114,450

--------------------- -------------------------

Answer 2

Answer:

Option A.

Explanation:

Given information:

Assets = $111,000

Liabilities = $39,000

Common Stock = $69,000

Retained Earnings = $3,000

Revenue = $5,900

Incurred expenses = $3,450

Dividends = $1,900

We need to find the amount of net income for the year.

Formula for net income is

Net income = Total revenue - Total expenses

                    = $5,900 - $3,450

                    = $2,450

The amount of Golden's net income for the year is $2,450.

Therefore, the correct option is A.