Question

Compute the missing amount for each of the following separate companies in columns B through E. (Losses and amounts to be deducted should be indicated with a minus sign.)

	CBS	ABC	CNN
Equity, beginning of year	$0	$0	$0	$0
Owner investments during the year	110,000		98,560	220,736
Dividends during the year		(54,000)	(9,000)	(54,000)
Net income (loss) for the year	106,000	54,640	(5,000)
Equity, end of year	$112,000	$108,640		$120,736

Answer 1

Case A:

Equity, end of year = Equity, beginning of year + Increase in equity
$112,000 = $0 + Increase in equity
Increase in equity = $112,000

Increase in equity = Owner investments during the year + Net income (loss) for the year - Dividends during the year
$112,000 = $110,000 + $106,000 - Dividends during the year
Dividends during the year = $104,000

Case B:

Equity, end of year = Equity, beginning of year + Increase in equity
$108,640 = $0 + Increase in equity
Increase in equity = $108,640

Increase in equity = Owner investments during the year + Net income (loss) for the year - Dividends during the year
$108,640 = Owner investments during the year + $54,640 - $54,000
Owner investments during the year = $108,000

Case C:

Increase in equity = Owner investments during the year + Net income (loss) for the year - Dividends during the year
Increase in equity = $98,560 - $5,000 - $9,000
Increase in equity = $84,560

Equity, end of year = Equity, beginning of year + Increase in equity
Equity, end of year = $0 + $84,560
Equity, end of year = $84,560

Case D:

Equity, end of year = Equity, beginning of year + Increase in equity
$120,736 = $0 + Increase in equity
Increase in equity = $120,736

Increase in equity = Owner investments during the year + Net income (loss) for the year - Dividends during the year
$120,736 = $220,736 + Net income (loss) for the year - $54,000
Net income (loss) for the year = -$46,000