The Following Information Applies to the Questions Displayed Below

question 25

Multiple Choice

The following information applies to the questions displayed below.

Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions:
1) issued stock for $40,000
2) borrowed $25,000 from its bank
3) provided consulting services for $39,000
4) paid back $15,000 of the bank loan
5) paid rent expense for $9,000
6) purchased equipment costing $12,000
7) paid $3,000 dividends to stockholders
8) paid employees' salaries, $21,000

-What is Yowell's net income?

• A)$9,000
• B)$30,000
• C)$18,000
• D)$6,000

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Definitions:

Standard Contract

A standard contract is a pre-drafted agreement using set terms and conditions, often used in routine business transactions where negotiation is minimal or not permitted.

Unilateral Mistake

A unilateral mistake occurs when only one party to a contract is mistaken about a basic assumption on which the contract is based.

Unilateral Mistake

A misunderstanding by one party in a contract that does not affect the other party's understanding, often not providing grounds for contract cancellation.

Stradivarius Violin

A Stradivarius violin refers to one of the string instruments built by members of the Stradivari family, particularly by Antonio Stradivari, renowned for their superb craftsmanship and powerful sound qualities, highly prized and valuable.