A Company Reported the Following Asset and Liability Balances at the End

question 92

Multiple Choice

A company reported the following asset and liability balances at the end of 2015 and 2016: During 2016, cash dividends of $50,000 were declared and paid, and common stock was issued for $100,000. What was the amount of net income for 2016?

• A)$400,000.
• B)$480,000.
• C)$350,000.
• D)$300,000.

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Definitions:

Bygones

In economics, the principle of "letting bygones be bygones" implies that past costs, which cannot be recovered, should not factor into future economic decisions.

Total Revenue

The complete total of earnings a firm gains through product sales or service charges over a set period.

Total Cost

The complete cost of production, including both fixed and variable costs. It represents the entire expense incurred in producing a good or service.

Free Entry

A market condition where firms can enter the industry without any barriers to entry, promoting competition.