Use This Adjusted Trial Balance to Answer the Following Question

question 65

Multiple Choice

Use this adjusted trial balance to answer the following question. $\begin{array}{c} \text { Dan's Marina}\\ \text { Adjusted Trial Balance}\\ \text { December 31, 2010}\\\begin{array}{|l|r|r|}\hline \text { Cash } & \$ 2,500 \\\text { Accounts Receivable } & 3,500 \\\text { Supplies } & 1,500 \\\text { Prepaid Insurance } & 2,500 \\\text { Dock } & 12,000\\\text { Accumulated Depreciation-Dock } & & \$ 3,000 \\\text { Accounts Payable } & & 6,000 \\\text { Common Stock } & & 10,000 \\\text { Dividends } & 4,000 & \\\text { Boat Rentals } & & 17,000\\\text { Depreciation Expense-Dock } & 1,000 & \\\text { Wages Expense } & 6,500 \\\text { Insurance Expense } & 2,000 & \\\text { Income Taxes Expense } & 500 \\& \$ 36,000 & \$ 36,000 \\\hline\end{array}\end{array}$ The amount of net income (or net loss) during the period is

• A) $16,000 net income.
• B) $4,500 net income.
• C) $5,000 net loss.
• D) $7,000 net income.

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Definitions:

Book Value

The net value of a company's assets subtracted by its liabilities and preferred stock, indicating what remains for common shareholders according to accounting standards.

Market Value

The existing cost for buying or selling an asset or company in the market.

Taxable Income

The amount of an individual's or entity's income used to determine how much tax is owed, calculated by deducting allowable deductions and exemptions from gross income.

Tangible Asset

Physical and material assets that can be seen, touched, or quantified, such as machinery, buildings, and inventory.