Garrison Industries Garrison Industries began operations on January 2,2014,with an investment of $50,000 by each of its two stockholders.Net income for its first year of business was $240,000.Garrison Industries paid a total of $100,000 in dividends to its stockholders during the year.
Read the information about Garrison Industries.If the company's revenues were $500,000 for the year ended December 31,2014,how much were total expenses?

Question

Quizplus · Accepted Answer

To determine the total expenses of Garrison Industries, we need to subtract the net income and dividends paid from the total revenues.

Total Revenues = $500,000

Net Income = $240,000

Dividends Paid = $100,000

Total Expenses = Total Revenues - Net Income - Dividends Paid

= $500,000 - $240,000 - $100,000

= $160,000

Therefore, the total expenses of Garrison Industries was $160,000.

Choice A) $160,000 is incorrect because it only represents the net income, not the total expenses.

Choice C) $640,000 and choice D) $740,000 are both incorrect because they represent a higher amount than the total revenues, which is not possible.

Hence, the correct answer is B) $260,000.

Garrison Industries Garrison Industries Began Operations on January 2,2014,with an Investment