Georgio Company Began 2014 with Net Assets of $80,000

question 120

Multiple Choice

Georgio Company began 2014 with net assets of $80,000. Net income calculated by using the capital maintenance concept was $21,000. During 2014 owners contributed $26,000 of new capital. By year-end, the net assets totaled $78,000. Dividends to the owners during 2014 were

• A) $49,000
• B) $28,000
• C) $23,000
• D) $2,000

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Definitions:

Net Income

The amount of total revenues minus total expenses, representing the profit a company has generated over a specific period.

Bonus

Additional compensation given to employees or executives beyond their regular salary, often as a reward for achieving certain performance targets.

Pre-bonus Income

The total revenue or profit earned by an individual or entity before any bonuses are issued or calculated.

Partnership Income

The earnings distributed to partners of a partnership based on the terms of the partnership agreement.