The total assets and the total liabilities of Samantha Financial Services, are shown below. There were no capital contributions and withdrawals during the year. $$\begin{array} { | l | r | r | }
\hline & \text { Assets } & \text { Liabilities } \
\hline \text { Beginning of year } & \$ 425,000 & \$ 280,000 \
\hline \text { End of year } & 500,000 & 325,000 \
\hline
\end{array}$$ What was the amount of net income for the year?

Question

The total assets and the total liabilities of Samantha Financial Services, are shown below. There were no capital contributions and withdrawals during the year. $$\begin{array} { | l | r | r | } 
\hline & \text { Assets } & \text { Liabilities } \
\hline \text { Beginning of year } & \$ 425,000 & \$ 280,000 \
\hline \text { End of year } & 500,000 & 325,000 \
\hline
\end{array}$$ What was the amount of net income for the year?

Quizplus · Accepted Answer

The change in total assets from the beginning of the year to the end of the year is an increase of $75,000 ($500,000 - $425,000). The change in total liabilities over the same period is an increase of $45,000 ($325,000 - $280,000). The difference between these two changes is the net income for the year, which is $30,000 ($75,000 - $45,000). Therefore, the correct answer is C.

The Total Assets and the Total Liabilities of Samantha Financial