Beginning Owner's Capital Is $20,000

question 119

Multiple Choice

Beginning owner's capital is $20,000.No capital contributions were made during the year.Drawings were $7,000.Ending owner's capital is $37,000.What was net income?

• A) $24,000
• B) $13,000
• C) $10,000
• D) $27,000

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Definitions:

Dividend Payout

The part of a company's profits that is paid out to shareholders as dividends.

Corporate Dividend

The distribution of a portion of a company's earnings, decided by the board of directors, to its shareholders.

Stock Repurchase

A stock repurchase is a program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares.

Tax Liability

The total amount of tax owed to the government by an individual, organization, or corporation.