Colby Company had assets of $280,000 and liabilities of $120,000 at the beginnin
ID: 2364242 • Letter: C
Question
Colby Company had assets of $280,000 and liabilities of $120,000 at the beginning of the year, and assets of $400,000 and liabilities of $140,000 at the end of the year. During the year, there was an investment of $40,000 in the business and the company paid dividends of $48,000. What amount of net income did the company earn during the year?
Colby Company had assets of $280,000 and liabilities of $120,000 at the beginning of the year, and assets of $400,000 and liabilities of $140,000 at the end of the year. During the year, there was an investment of $40,000 in the business and the company paid dividends of $48,000. What amount of net income did the company earn during the year?
Explanation / Answer
Assets = Liabilities + Equity Net income and added investments increase Equity, Dividends decrease Equity. Beginning of the year. 280,000 = 120,000 + 160,000 End of the year 400,000 = 140,000 + 260,000 160,000 + 40,000 + Net Income - 48,000 = 260,000 Net Income = 108,000 please rate me