Question

Golden Enterprises started the year with the following: Assets $127,000; Liabilities $43,000; Common Stock $73,000; Retained Earnings $11,000. During the year, the company earned revenue of $6,700, all of which was received in cash, and incurred expenses of $3,850, all of which were unpaid as of the end of the year. In addition, the company paid dividends of $2,700 to owners. Assume no other activities occurred during the year. What was the amount of Golden's net income for the year?

Answer 1

Answer:

Net income for the year is $2,850

Explanation:

The computation of the net income is shown below:

Net income is  

= Sales revenue - expenses incurred

= $6,700 - $3,850

= $2,850

We simply deducted the expenses incurred from the sales revenue so that the net income could come and the same is to be considered

Hence, the net income for the year is $2,850