The ABC, Inc. company had the following events for the tax year 2020, the first year of operation for ABC, Inc.: 

Stockholders contributed $50,000 into the corporation. 

Sales for the year were $250,000, with Purchases of merchandise for $100,000. 

They paid salaries in the amount of $80,000, office rent of $12,000

Transportation charges of $6,000. 

On December 28, 2020, they received a payment of $25,000 for services to be performed in 2021. 

They purchased office furniture for $2,000 and had utility expenses of $4,000. 

ABC, Inc. paid dividends of $10,000, and had miscellaneous rental income of $5,000. 

ABC, Inc. uses the FIFO inventory method and had an ending inventory of $10,000. 

They purchased an insurance policy on January 2, 2020 with a premium of $1000. 

Assuming no depreciation nor income taxes, calculate the following two items:

a. Net Income for 2020 

b. Retained earnings balance as of 12/31/20

Answer rating: 100% (QA)

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