The total assets and the total liabilities of Smart Financia

The total assets and the total liabilities of Smart Financial Services are shown below. The company issued no common stock and paid no dividends during the year

Assets Liabilities
Beginning of year $405,000 $270,000
End of year 455,000 300,000

What was the amount of net income for the year?
A) $50,000
B) $30,000
C) $20,000
D) $80,000

ANSWER

C .Calculations:
Assets Liabilities
End of year total $455,000 $300,000
Less: beginning of year total (405,000 ) (270,000 )
Increase or (decrease) $50,000 $30,000

Net increase or (decrease) = $50,000 – $30,000 = $20,000