Sparty Corporation Has Provided the Following Information for Its Most

question 118

Multiple Choice

Sparty Corporation has provided the following information for its most recent year of operation: Revenues earned were $97,000,of which $9,000 were uncollected at the end of the year.
Operating expenses incurred were $39,000,of which $7,000 were unpaid at the end of the year.
Dividends declared were $11,000,of which $3,000 were unpaid at the end of the year.
Income tax expense is $17,400.
What is the amount of net income reported on Sparty's income statement?

• A)$32,900.
• B)$39,300.
• C)$33,600.
• D)$40,600.

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Definitions:

Debt Trading Security

A financial instrument representing a debt that can be bought or sold in the securities market.

Available-for-sale

A classification of securities that are not actively managed for trading or held to maturity but can be sold for cash needs or other purposes.

Unrealized Holding Gain

Refers to an increase in the value of an investment that has not been sold yet, thus the gain is not "realized."

Passive Debt Investments

Investments in debt instruments, such as bonds, where the investor does not exert influence over the issuer.