At the beginning of Year 2, X Company had assets of $300, liabilities of $150, and common stock of $50. During Year 2, the company earned revenue of $500, incurred expenses of $200, and paid dividends of $50. All transactions were cash transactionsThe amount of net income reported on X Company's December 31, Year 2 income statement would be
A) $500
B) $300
C) $250
D) None of these answers are correct.

Question

Quizplus · Accepted Answer

Net income is calculated as Revenue - Expenses. For X Company, this is $500 (Revenue) - $200 (Expenses) = $300.

At the Beginning of Year 2, X Company Had Assets