During the year, the company earned revenue of $5,400, all of which was received
ID: 2417829 • Letter: D
Question
During the year, the company earned revenue of $5,400, all of which was received in cash, and incurred expenses of $3,200, all of which were unpaid as of the end of the year. In addition, the company paid dividends of $1,400 to owners. Assume no other activities occurred during the year.
What was the amount of net income for the year?
$3,200
$2,200
$1,400
$5,400
A company started the year with the following: Assets $104,000; Liabilities $34,000; Common Stock $64,000; Retained Earnings $6,000.During the year, the company earned revenue of $5,400, all of which was received in cash, and incurred expenses of $3,200, all of which were unpaid as of the end of the year. In addition, the company paid dividends of $1,400 to owners. Assume no other activities occurred during the year.
Explanation / Answer
Net income=
Revenues ($54,00) Expenses ($3,200)
= $2,200
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