Question

On January 1, 2018, Cat Power Company reported stockholders' equity of $705,000. During the year, the company paid dividends of $30,000. At December 31, 2018, the amount of stockholders' equity was $825,000. What amount of net income or net loss would the company report for 2015?
(A) Net loss of $30,000

(B) Net income of $90,000

(C) Net income of $120,000

(D) Net income of $150,000

Answer 1

Answer:

D. Net income of $150,000

Explanation:

$705,000 + X - $30,000 = $825,000

X = $150,000