Net Income Is $29,000

question 146

Multiple Choice

Net income is $29,000.Beginning capital balance was $34,000.Ending capital balance was $55,000.No capital contributions were made by the owner during the year.What amount of drawings was made?

• A) $18,000
• B) $8,000
• C) $5,000
• D) $60,000

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, granting holders voting rights and a share in the company's profits through dividends.

Statement of Cash Flows

A financial report that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Operating Activities

Activities that relate directly to the operations of a company, including cash flows from selling goods and services.

Indirect Method

A method for preparing the cash flow statement where net income is adjusted for changes in balance sheet items to calculate cash flow from operating activities.