6 Here are the assets and liabilities of Fast Yellow Corp as

6. Here are the assets and liabilities of Fast Yellow Corp. as of the beginning and end Assets Liabilities Beginning of the year End of the year 75,000 130,000 34,000 60,000 uring 2015 Fast Yellow paid dividend Fast Yellow\'s shareholders purchased additional common stock for $15,000, and s of $4,000. What was Fast Yellow\'s NET INCOME for the year? ?. 18,000 B. 29,000 C. 55,000 D. 19,000 nC?. E. none of these are correct

Solution

Assets= Liabilites   + Equity Beginning 75,000 = 34000 + 41000 ending 130,000= 60,000+ 70,000 Equity opening balance 41,000 Add:stock purchased 15,000 56,000 Add: Retained earnings(net increase) 14,000 Closing Equity balance 70,000 net increase in retained earnings is $14,000 out of which 4000 is the dividend paid hence net income will be 14000+4000= 18,000 Answer )option A $18,000