A corporation had the following assets and liabilities at the beginning and end of this year....

A corporation had the following assets and liabilities at the beginning and end of this year.

	Assets			Liabilities
Beginning of the year		$	133,000		$	57,017
End of the year			182,500			73,913

Owner made no investments in the business, and no dividends were paid during the year.
Owner made no investments in the business, but dividends were $700 cash per month.
No dividends were paid during the year, but the owner did invest an additional $45,000 cash in exchange for common stock.
Dividends were $700 cash per month, and the owner invested an additional $35,000 cash in exchange for common stock.

Determine net income or net loss for the business during the year for each of the above separate cases: (Decreases in equity should be indicated with a minus sign.)

Solutions

Expert Solution

Equity = Assets - Liabilities
Net Income = Ending Equity - Beginning Equity - Additional Investment + Dividend paid
	Case 1	Case 2	Case 3	Case 4
Beginning Equity	75,983	75,983	75,983	75,983
Ending Equity	108,587	108,587	108,587	108,587
Dividend paid	0	8400	0	8400
Additional Investment in Equity	0	0	45000	35000
Net Income	32,604	41,004	-12396	6,004

ekkarill92 answered 1 year ago

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