Essay
Below are several amounts from Netcom Company's accounting records.Answer the questions that follow.
Total assets, end of year $190,000
Total liabilities, end of year 30,000
Contributed capital, end of year 20,000
Retained earnings, beginning of year 65,000
Dividends for the period 15,000
Net income 32,000
A. Calculate the amount of retained earnings at the end of the year.
B. If revenue amounts to $220,000, how much is 'total expenses'?
C. How do you know the company has been profitable since it began operations?
Correct Answer:
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A.$65,000 + $32,000 -$15,000 = $82,000
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Correct Answer:
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B...
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