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?

Question

Quizplus · Accepted Answer

Net Income = Revenues - Expenses - Dividends
Net Income = $555,000 - $420,000 - $30,000
Net Income = $105,000

However, since Kennedy is the sole owner of the company, his net income will be the same as the company's net income. Therefore, Kennedy's net income for the year is $105,000.

Kennedy Company Issued Stock to Ed Kennedy in Exchange for His