Lena Company Has Provided the Following Data (Ignore Income Taxes)

question 106

Multiple Choice

Lena Company has provided the following data (ignore income taxes) : 2016 revenues were $99,000.
2016 expenses were $47,800.
Dividends declared and paid during 2016 totaled $9,500.
Total assets at December 31, 2016 were $177,000.
Total liabilities at December 31, 2016 were $89,000.
Common stock at December 31, 2016 was $28,000.
Which of the following is correct?

• A)2016 net income was $41,700.
• B)Total stockholders' equity at December 31, 2016 was $236,000.
• C)Retained earnings at December 31, 2016 were $60,000.
• D)Retained earnings at December 31, 2016 were $41,700.

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Definitions:

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate overhead costs to products or cost objects based on a planned activity level.

Total Manufacturing Cost

The aggregate cost of direct materials, direct labor, and manufacturing overhead incurred in producing products.

Machine-Hours

A measure of production time, referring to the number of hours a machine is operated in the manufacturing process.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to individual units of production, based on estimated costs and activity levels.