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16 July, 18:18

The changes in account balances for Elder Company for 2018 are as follows: Assets $ 680,000 debit Common stock 350,000 credit Liabilities 190,000 credit Paid-in capital-excess of par 30,000 credit Assuming the only changes in retained earnings in 2018 were for net income and a $50,000 dividend, what was net income for 2018?

(A) $140,000.

(B) $150,000.

(C) $160,000.

(D) $170,000.

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  1. 16 July, 18:46
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    Net income will be $160000

    So option (c) will be the correct answer

    Explanation:

    We have given debt common stock = $680000

    Credit liabilities = 350000

    Credit paid in capital = 190000

    And excess of par 30,000 credit Assuming the only changes in retained earnings

    So 680000 = 350000+190000+30000 + retained earning

    So retained earning = $110000

    Dividend paid = $50000

    So net income = dividend paid + retained earning = $110000+$50000 = $160000

    So option (c) will be the correct answer
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