PDA

View Full Version : Help figuring out net income without revenue


jc1393
Sep 2, 2013, 08:13 AM
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
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
Sep 2, 2013, 08:56 AM
Thank you so much for your help!!