Dynamic Production Services started the year with total assets of $120,000 and total liabilities of $55,000. The revenues and the expenses for the year amounted to $100,000 and $80,000, respectively. During the year, the company did not issue any common stock, but it distributed dividends of $50,000. Calculate Dynamic's net income for the year.
A) $20,000
B) $100,000
C) $80,000
D) $120,000

Question

Quizplus · Accepted Answer

To calculate the net income, we need to use the formula:

Net Income = Revenues - Expenses - Dividends

Substituting the given values, we get:

Net Income = $100,000 - $80,000 - $50,000
Net Income = $20,000

Therefore, the correct answer is A) $20,000.

Dynamic Production Services Started the Year with Total Assets of $120,000