Sparty Corporation has provided the following information for its most recent year of operation:

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answerhappygod
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Sparty Corporation has provided the following information for its most recent year of operation:

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Revenues earned were $97,000, of which $9,000 were uncollected at the end of the year.
Operating expenses incurred were $39,000, of which $7,000 were unpaid at the end of the year.
Dividends declared were $11,000, of which $3,000 were unpaid at the end of the year.
Income tax expense is $17,400.
What is the amount of net income reported on Sparty's income statement?
A) $32,900.
B) $39,300.
C) $33,600.
D) $40,600.
Answer: D
Explanation: $40,600 = Revenues earned ($97,000) minus operating expenses ($39,000) minus
income tax expense ($17,400).
Difficulty: 2 Medium
Topic: Financial statements—Income statement
Learning Objective: 01-01 Recognize the information conveyed in each of the four basic
financial statements and the way that it is used by different decision makers (investors, creditors,
and managers).
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