Slow,Inc.,reported the following asset and liability balances at the ends of 20A and 20B: During 20B,cash dividends of $5,000 were declared and paid.Additional shares were issued for $15,000.What was the profit (or loss)for 20B?
A)$30,000
B)$35,000
C)$40,000
D)$45,000

Question

Quizplus · Accepted Answer

The profit (or loss) for 20B is calculated as the change in net assets, which is the difference between the total assets and total liabilities. The total assets increased by $15,000 (from $100,000 to $115,000), and the total liabilities decreased by $5,000 (from $20,000 to $15,000). Therefore, the net assets increased by $20,000 (from $80,000 to $100,000). This means that the profit for 20B was $20,000.

Slow,Inc,Reported the Following Asset and Liability Balances at the Ends