Asked by Bianca Benincasa on Jun 21, 2024
Verified
Revenues for the year totaled $162,000 and expenses totaled $174,000. The stockholders purchased $15,000 of common stock and were paid $6,000 in dividends during the year. What was the net income or net loss for the year?
A) $12,000 net income
B) $12,000 net loss
C) $18,000 net loss
D) $6,000 net loss
Net Income
The total earnings of a company after subtracting all expenses, taxes, and costs from the total revenue.
Common Stock
Represents equity ownership in a corporation, with holders possibly entitled to vote on corporate policy and receive dividends.
Dividends
Payments made by a corporation to its shareholder members, distributed from the company's profits.
- Understand the concept of net income and net loss and how to calculate them from revenues and expenses.
Verified Answer
AP
Angie PradoJun 21, 2024
Final Answer :
B
Explanation :
To calculate the net income or net loss, we need to subtract the expenses from the revenues:
$162,000 - $174,000 = -$12,000
This means that there was a net loss of $12,000 for the year. The stockholders purchasing common stock and being paid dividends doesn't impact the net income/loss calculation.
$162,000 - $174,000 = -$12,000
This means that there was a net loss of $12,000 for the year. The stockholders purchasing common stock and being paid dividends doesn't impact the net income/loss calculation.
Learning Objectives
- Understand the concept of net income and net loss and how to calculate them from revenues and expenses.