Georgio Company began 2015 with net assets of $80,000. Net income calculated by using the capital maintenance concept was $21,000. During 2015, owners contributed $26,000 of new capital. By year-end, the net assets totaled $78,000. Dividends to the owners during 2015 were
A) $49,000.
B) $28,000.
C) $23,000.
D) $2,000.

Question

Quizplus · Accepted Answer

The change in net assets is calculated as: Beginning net assets ($80,000) + Net income ($21,000) + New capital ($26,000) - Dividends = Ending net assets ($78,000). Solving for dividends gives $49,000.

Georgio Company Began 2015 with Net Assets of $80,000