Question

Beginning of Year Assets: $26,000 $18,000

End of Year Liabilities: $62,000 $25,000

3) If the company issues common stock of $5,600 and pay dividends of $39,400, how much is net income (loss)?

4) If net income is $1,700 and dividends are $6,600, how much is common stock?

5) If the company issues common stock of $18,300 and net income is $18,400, how much is dividends?

6) If the company issues common stock of $42,700 and pay dividends of $3,400, how much is net income (loss)?

Answer 1

	Assets (1)	Liabilities (2)	Equity (3) = (1)-(2)
Beginning of year	26,000	18,000	8,000
End of year	62,000	25,000	37,000

3)

Ending equity = Beginning equity+Common stock issued+Net income-Dividends

37,000 = 8,000+5,600+Net income-39,400

37,000=Net income-25,800

Net income =62,800

4)

Ending equity = Beginning equity+Common stock issued+Net income-Dividends

37,000 = 8,000+Common stock issued+1,700-6,600

37,000=Common stock issued+3,100

Common stock issued = 33,900

5)

Ending equity = Beginning equity+Common stock issued+Net income-Dividends

37,000 = 8,000+18,300+18,400-Dividends

37,000=44,700-Dividends

Dividends = 44,700-37,000

Dividends = 7,700

6)

Ending equity = Beginning equity+Common stock issued+Net income (loss)-Dividends

37,000 = 8,000+42,700+Net income(loss)-3,400

37,000=Net income (loss)+47,300

Net loss =10,300