Lena Company Has Provided the Following Data (Ignore Income Taxes)

question 90

Multiple Choice

Lena Company has provided the following data (ignore income taxes) :
2010 revenues were $99,000.
2010 expenses were $47,800.
Dividends declared and paid during 2010 totaled $9,500.
Total assets on December 31,2010 were $177,000.
Total liabilities on December 31,2010 were $89,000.
Contributed capital on December 31,2010 was $28,000.
Which of the following is correct?

• A)2010 net income was $41,700.
• B)Total stockholders' equity on December 31, 2010 was $236,000.
• C)Retained earnings on December 31, 2010 were $60,000.
• D)Retained earnings on December 31, 2010 were $41,700.

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Definitions:

Administrative Expense

Expenses that are not directly tied to the production of goods or services, including salaries of executive officers, legal and office expenses.

Sales Commissions

Financial compensation paid to sales representatives, usually a percentage of the sales they generate, as an incentive to increase sales performance.

Indirect Labor

Labor costs of employees who support the production process but are not directly involved in the active production of goods or services.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, excluding direct materials and direct labor costs.