Question

Gatto Production Services started the year with total assets of $80,000 and total liabilities of $55,000. The revenues and the expenses for the year amounted to $100,000 and $90,000​, respectively. During the​ year, the company did not issue any common​ stock, but it distributed dividends of $55,000.

Calculate​ Gatto's net income for the year.

A. $100,000
B. $80,000
C. $10,000
D. $90,000

Answer 1

Gatto Production Services' net income for the year is calculated by subtracting expenses from revenues, which results in $10,000.

Step-by-step explanation:

To calculate Gatto Production Services' net income for the year, we subtract the total expenses from the total revenues. Given that the revenues are $100,000 and the expenses are $90,000, we perform the following calculation: $100,000 - $90,000 = $10,000. Therefore, the net income for Gatto Production Services for the year is $10,000.