For Each of the Following, Determine the Amount of Net $\$ 71,300$

question 208

Essay

For each of the following, determine the amount of net income or net loss for the year. (a) Revenues for the year totaled $\$ 71,300$ and expenses totaled $\$ 35,500$ . The shareholders purchased $\$ 15,000$ of common stock during the year.
(b) Revenues for the year totaled $\$ 220,500$ and expenses total ed $\$ 175,000$ . The shareholders were paid $\$ 40,000$ dividends during the year.
(c) Revenues for the year totaled $\$ 149,000$ and expenses total ed $\$ 172,000$ . The shareholders purchased $\$ 12,000$ of common stock and were paid $\$ 16,000$ in dividends during the year.
(d) Revenues for the year totaled $\$ 198,150$ and expenses total ed $\$ 174,200$ . The shareholders were paid $\$ 35,000$ dividends during the year.

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Definitions:

Cost Flow Assumptions

Assumptions made about how costs flow through inventory accounts that affect the cost of goods sold and ending inventory valuation.

LIFO

Last In, First Out, an inventory valuation method where the most recently produced or purchased items are the first to be expensed.

Dollar-Value LIFO

Dollar-Value LIFO method is an inventory costing method that uses the LIFO principle coupled with grouping inventory into pools based on dollar value instead of physical units.

Base Year Cost

The initial cost of an asset or investment, used as a reference point to measure the cost growth or performance over time.