Use the Information Given Below to Answer the Following Questions

question 29

Multiple Choice

Use the information given below to answer the following questions:
During 2012, Bull Ltd earned revenues of $500 and incurred expenses of $650. Retained profits at 1 January 2012 were $400, and at 31 December 2012 they were $225. At 31 December 2012, assets totalled $1125 and share capital $300. There were no transfers to reserves during 2012.
-What was the net profit or loss of Bull Ltd for the year?

• A) net profit $150
• B) net profit $500
• C) net loss $150
• D) net loss $500.

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Definitions:

Accumulated Depreciation

The total depreciation for a fixed asset that has been charged to expense since that asset was acquired and made available for use.

Retained Earnings

Accumulated net income after dividends that is reinvested in the business.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue, a key indicator of a company's financial health.

Retained Earnings

The portion of profits kept in the company rather than paid out as dividends, which can be used for investment or debt reduction.