Question

Langston company began the year by issuing $120,000 of common stock for cash. The company recorded revenues of $1,100,000, expenses of $960,000, and paid dividends of $60,000. What was Langston's net income for the year?

Answer 1

Langston Company's net income for the year was $80,000.

Step-by-step explanation:

Langston Company's net income for the year can be calculated by subtracting expenses and dividends from revenues. Revenues, also known as sales or sales revenue, represent the amount of money the company earned from its business activities. In this case, the revenues were $1,100,000. Expenses, on the other hand, refer to the costs incurred by the company to generate those revenues. In this case, the expenses were $960,000. Finally, dividends are the payments made to the shareholders of the company. In this case, the dividends were $60,000.

To calculate the net income, we subtract the expenses and dividends from the revenues:

Net Income = Revenues - Expenses - Dividends

Net Income = $1,100,000 - $960,000 - $60,000 = $80,000

Therefore, Langston Company's net income for the year was $80,000.