Question

At the beginning of the current fiscal year, the balance sheet for Davis Co. showed liabilities of $256,000. During the year liabilities decreased by $14,400, assets increased by $52,000, and paid-in capital increased from $24,000 to $153,600. Dividends declared and paid during the year were $20,000. At the end of the year, stockholdersâ equity totaled $343,200.



Required:
Calculate net income (or loss) for the year. (Negative amounts should be indicated by a minus sign.)

Stockholdersâ Equity
Assets = Liabilities + PIC + RE
Beginning: = $256,000 + 24,000 +
Changes: 52,000 = (14,400) + +
Ending: = + 153,600 + ($343200 total SE)
Statement of Stockholders' Equity
Retained earnings, beginning
Less: Net loss
Less: Dividends
Retained earnings, ending $0

Answer 1

Answer:

-$43,200

Explanation:

Required:

Calculate net income (or loss) for the year. (Negative amounts should be indicated by a minus sign.)

assets = liabilities + stockholders' equity

ending liabilities = $256,000 - $14,400 = $241,600

ending stockholders' equity = $343,200

ending assets = $241,600  + $343,200 = $584,800

beginning assets = $584,800 - $52,000 = $532,800

beginning liability = $256,000

beginning stockholders' equity = $532,800 - $256,000 = $276,800

beginning stockholders' equity $276,800

+ additional paid in capital $129,600

- dividends ($20,000)

+ net income ?

= ending balance stockholders' equity $343,200

net income = ending balance stockholders' equity + dividends - additional paid in capital - beginning balance = $343,200 + $20,000 - $129,600 - $276,800 = -$43,200