Ask Experts Questions for FREE Help !
Ask
    grasshopper1228's Avatar
    grasshopper1228 Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Jul 9, 2014, 10:08 PM
    Finding Net Income with Assets, Liabilities and Investment
    I need help answering the first and how to get to that answer and I will figure out the rest of it hopefully. I am new to accounting and I am also lost when it comes to this question. Andruw Company had the following assets and liabilities on the dates indicated.

    December 31
    Total Assets
    Total Liabilities
    2011 $494,395 $284,792
    2012 $554,395 $334,792
    2013 $684,395 $434,792

    Andruw began business on January 1, 2011, with an investment of $95,308.

    From an analysis of the change in owner’s equity during the year, compute the net income (or loss) for:

    (a) 2011, assuming Andruw’s drawings were $20,484 for the year.

    Net income for 2011 $

    (b) 2012, assuming Andruw made an additional investment of $42,366 and had no drawings in 2012.

    Net loss for 2012 $

    (c) 2013, assuming Andruw made an additional investment of $16,566 and had drawings of $34,429 in 2013.

    Net income for 2013 $
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
    		  
    #2

    Jul 10, 2014, 02:03 PM
    First you have to know the basic accounting equation, which is:
    Assets = Liabilities + Owners Equity
    You should be able to get your owners equity for the end of each year.

    The ending year amount is the beginning amount for the next year.

    Now you have to account for the change in equity for each year. The formula for this is:
    Ending Owners Equity = Beginning Owners Equity + Investments - Drawings or Dividends + Net Income (Revenues - Expenses)

    This formula can be rewritten to find Net Income as:
    Net Income = Ending Owners Equity - Beginning Owners Equity - invvestments + Drawings or Dividends
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Compute net income with assets and liabilities [ 3 Answers ]

Lily Company had the following assets and liabilities on the dates indicated. December 31 Total Assets Total Liabilities 2009 $400,000 $250,000 2010 $460,000 $300,000

How do you find net income when you're given assets and liabilities [ 1 Answers ]

I am given total assets = $400,000 and total liabilities = $250,000. I am also given the initial investment which = $100,000 and drawings which was $15,000. My question is, From an analysis of the change in owner's equity during the year, compute the net income (or loss)

Finding net income with assets and liabilities from pervious year, asstes and liabili [ 1 Answers ]

I have Assets for December(2008) as 25740, liabilities as 18018. Assets for December(2009) 25920 and liabilities as 17625. During 2000 stock issuances as 1400 and cash dividends as 2000. I need to find the net income or loss. Any help?

View more questions Search