Question:
The following information pertains to the next three questions. At the beginning of 2006, X Company had assets of $300, liabilities of $150, and common stock of $50. During 2006 the company earned revenue of $400, incurred expenses of $250, and paid dividends of $100. All transactions were cash transactions.
1.The amount of net income reported on the 2006 income statement would be
a.$400.
b.$150.
c.$ 50. ?
d.none of the above.
income minus expenses equals net; therefore,
$400 - $250 = $150
"B" is the answer.
The other items are not used to calculate this.
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