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    jc1393's Avatar
    jc1393 Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Sep 2, 2013, 08:13 AM
    Help figuring out net income without revenue
    Hello, I was wondering if someone could help me with this problem on finding revenue.

    January 1st,
    Assets- 1151549
    Liabilities- 94718
    Stockholders equity- 56831

    December 31,
    Assets 252580
    Liabilities- 88403
    Stockholders equity- 164177

    Additional Investment- 12629
    Dividends- 17681

    Total Revenue-??
    Total Expenses- 431912

    Any help is really appreciated
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Sep 2, 2013, 08:24 AM
    You have to use known amounts to solve for unknown amounts and you need know how to get revenues based on the information provided. Revenues affect Net Income and Equity, so based on the information provided you have start with the change in Equity from Jan 1 to Dec 31.

    So the first unknown you need is Net Income and the formula you need is:
    Ending Equity = Beginning Equity + Additional Investments + Net Income - Cash Dividends.

    Rewritten as:
    Net Income = Ending Equity - Beginning Equity - Additional Investments + Cash Dividends

    Now with Net Income you can solve for revenues. Your formula is:

    Net Income = Revenues - Expenses
    Which can be rewritten as:
    Revenues = Net Income + Expenses
    jc1393's Avatar
    jc1393 Posts: 2, Reputation: 1
    New Member
    		  
    #3

    Sep 2, 2013, 08:56 AM
    Thank you so much for your help!!
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