A Company Started the Year with the Following: Assets $100,000;

question 17

Multiple Choice

A company started the year with the following: Assets $100,000; Liabilities $30,000; Common Stock $60,000; Retained Earnings $10,000.During the year, the company earned revenue of $5,000, all of which was received in cash, and incurred expenses of $3,000, all of which were unpaid as of the end of the year.In addition, the company paid dividends of $1,000 to owners.Assume no other activities occurred during the year.
-Use the information above to answer the following question.What was the amount of net income for the year?

• A) $2,000.
• B) $1,000.
• C) $3,000.
• D) $5,000.

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