Question

In its first year of operation Froggie company’s revenue for the year amounted to $5,000. Cash collections of accounts receivable amounted to $2,300. Expenses for the period were $2,100. The company paid dividends of $450. Net income for the period was _________.A. $1,200.
B. $2,900. C. $2,850. D. $2,450.

Answer 1

Answer:

B. $2900

Explanation:

Given that revenue = 5000

Expenses = 2100

Recall that

Net income = total revenue - total expenses

Thus,

Net income = 5000 - 2100

= $2900

NOTE: account receivable and dividends are not used in the calculation because they are part of the company's revenue for the year and expenses for the period respectively.