During 2016, Banigo Corporation experienced an increase in total assets of $72,600 and an increase in total liabilities of $40,900.Assuming that capital stock increased by $5,000 and no dividends were paid, calculate Banigo's net income or net loss for 2016.
A) Net income of $26,700
B) Net loss of $31,700
C) Net income of $67,600
D) Net loss of $45,900

Question

Quizplus · Accepted Answer

The net income can be calculated by understanding that the increase in total assets ($72,600) minus the increase in total liabilities ($40,900) and the increase in capital stock ($5,000) equals the net income, since no dividends were paid. Therefore, $72,600 - $40,900 - $5,000 = $26,700, indicating a net income of $26,700.

During 2016, Banigo Corporation Experienced an Increase in Total Assets