Stosch Company's Balance Sheet Reported Assets of $40,000, Liabilities of $15,000

question 176

Multiple Choice

Stosch Company's balance sheet reported assets of $40,000, liabilities of $15,000 and common stock of $12,000 as of December 31, Year 1. If Retained Earnings on the balance sheet as of December 31, Year 2, amount to $18,000 and Stosch paid a $14,000 dividend during Year 2, then the amount of net income for Year 2 was which of the following?

• A) $17,000
• B) $19,000
• C) $13,000
• D) $21,000

---

Definitions:

Groundwater

Water that is held underground in the soil or in pores and crevices in rock.

Lakes

large bodies of water that are surrounded by land and are not part of the ocean.

Atmosphere

The gaseous envelope that surrounds the solid Earth and includes air, clouds, and precipitation.

Glaciers

Large masses of ice that move slowly over land, formed by the accumulation and compaction of snow, and can shape landscapes through erosion.