The Income Statement for Hudson Company Reported Net Income of $345,000

question 73

Essay

The income statement for Hudson Company reported net income of $345,000 for the year ended December 31 before considering the following:

During the year, the company purchased trading securities.
At year-end, the fair value of the investment portfolio was $23,000 less than cost.
The balance of Retained Earnings was $823,000 on January 1.
Hudson Company paid $43,000 in cash dividends during the year.Calculate the balance of Retained Earnings on December 31.

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Definitions:

Trading Costs

Expenses associated with buying and selling securities, including commissions, spreads, and fees.

Open-end

A type of mutual fund that does not have a fixed number of shares and can issue new shares or redeem existing shares at any time based on investor demand.

Net Asset Value

The per-share value of a mutual fund or exchange-traded fund, calculated by dividing the total value of all securities in the portfolio by the number of shares outstanding.

Net Asset Value

Net Asset Value (NAV) is the per-share value of a mutual fund or ETF, calculated by dividing the total value of all the assets in the portfolio, minus liabilities, by the number of shares outstanding.