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7. Given that :
Change in assets = Rs.10,000
Change in liabilities = Rs.5,000
Change in contributed Capital = Rs.2,000
Dividend to owners = Rs.1,000
Which of the following will be the Income under the
Income statement that documents the financial
performance of the firm?
A. Rs.5,000
B. Rs.10,000
C. Rs.4,000
D. Rs.8,000
Owners Equity = Asset - Liability
Retained Earning = 10000 - 5000 = 5000
Income = Owners Equity - Contributed Capital
Ans. C = 5000 - 2000 = 3000
= Retained Earning + Dividend
= 3000 + 1000 = 4000
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