Fat Possum's Service Shop started the year with total assets of $330,000 and total liabilities of $240,000.During the year, the business recorded $630,000 in revenues, $420,000 in expenses, and paid dividends of $60,000. The net income reported by Fat Possum's Service Shop for the year was

Question

Quizplus · Accepted Answer

Net income can be calculated by subtracting expenses from revenues:
$630,000 - $420,000 = $210,000

To confirm this, we can also calculate the change in total equity:
Beginning equity = $90,000 ($330,000 - $240,000)
Add net income = $210,000
Subtract dividends = $60,000
Ending equity = $240,000

Therefore, the net income reported by Fat Possum's Service Shop for the year was $210,000.

Fat Possum's Service Shop Started the Year with Total Assets