Kennedy Company issued stock to Ed Kennedy in exchange for his investment of $75,000 cash in the business. The company recorded revenues of $555,000, expenses of $420,000, and had paid dividends of $30,000. What was Kennedy's net income for the year?
A) $105,000.
B) $135,000.
C) $165,000.
D) $180,000.

Question

Quizplus · Accepted Answer

Net income is calculated as revenues minus expenses. Therefore, Kennedy's net income is $555,000 - $420,000 = $135,000. Dividends do not affect net income.

Kennedy Company Issued Stock to Ed Kennedy in Exchange for His