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    ladygainsbourg's Avatar
    ladygainsbourg Posts: 2, Reputation: 1
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    #1

    Aug 11, 2012, 06:42 PM
    net income at the end of the year calculation dividens revenue
    Hi eveybody! I need some help :( I need the answers of these 2 questions. Thank you so much in advance for your help!!


    1)Before paying any dividends, X company has a net income of $35,000. If the board of directors then decide to pay out dividends this year of $15,000. This year's revenue is $95,000. What is the net income at the end of the year?

    2)n December, X company purchases and sells 20 cell phones. The phones cost $25 each and were sold for $100 each. The phones were purchased and paid for in December. The phones were sold "on account" and will be paid for in January of next year. If Avatar cell uses the cash method of accounting, then the gross profit from this sale at the end of December is?
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
    Ultra Member
    		  
    #2

    Aug 11, 2012, 07:42 PM
    Some principles

    Dividends are a distribution of income

    Cash accounting generally means there are no adjustments to match revenue and expenses

    What do you mean by revenue, gross sales or net profit?
    ladygainsbourg's Avatar
    ladygainsbourg Posts: 2, Reputation: 1
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    #3

    Aug 11, 2012, 09:02 PM
    This company uses accrual method not cash
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