If Total Assets Increased by $500,000 During a Period and Total

question 21

Multiple Choice

If total assets increased by $500,000 during a period and total liabilities increased by $420,000 during the same period, determine the net income (or loss) for the year , assuming no common stock was issued and dividends of $40,000 were paid.​

• A) $40,000
• B) $210,000
• C) $120,000
• D) $290,000

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Definitions:

Research and Development

Activities undertaken by a company to innovate and introduce new products or services, often categorized as an expense.

Interim Period

A span of time less than one fiscal year, but which typically consists of a quarter or a half year, used for financial reporting purposes.

Annual Tax Rate

The annual tax rate is the percentage at which an individual or corporation is taxed on their annual income.

Tax Expense

The total amount of taxes a company is obligated to pay to various governmental authorities, reflected in its financial statements.