Question

Bennett Griffin and Chula Garza organized Cole Valley Book Store as a corporation; each contributed $80,000 cash to start the business and received 4,000 shares of common stock. The store completed its first year of operations on December 31, current year. On that date, the following financial items for the year were determined: December 31, current year, cash on hand and in the bank, $75,600; December 31, current year, amounts due from customers from sales of books, $39,000; unused portion of store and office equipment, $73,000; December 31, current year, amounts owed to publishers for books purchased, $12,000; one-year note payable to a local bank for $3,000. No dividends were declared or paid to the stockholders during the year. What was the amount of net income for the year?

Answer 1

1478390 idk : ) please help this person

Answer 2

What was the amount of net income for the year? 65,600

We solve for net income using the accounting equation A = L + E

cash                           75,600

account receivables 39,000

PPE                             73,000

Total Assets              187,600

Account Payables      12,000

Note payable            30,000

Total Liabilities          42,000

Equity

Common Stock         80,000

Net income                        ?

Assets  = Liabilities + Equity

187,600 = 42,000 + Equity

187,600 = 42,000 + 80,000 + Income

Income = 187,600 - 42,000 - 80,000 = 65,600