Iverson Company had the following assets and liabilities on the dates indicated.

December 31		Total Assets		Total Liabilities
2013		$461,492		$261,140
2014		$521,492		$311,140
2015		$651,492		$411,140

Iverson began business on January 1, 2013, with an investment of $98,231.

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

(a) 2013, assuming Iverson’s drawings were $18,438 for the year.

Net income for 2013

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(b) 2014, assuming Iverson made an additional investment of $43,816 and had no drawings in 2014.

Net loss for 2014

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(c) 2015, assuming Iverson made an additional investment of $19,655 and had drawings of $32,794 in 2015.

Net income for 2015

$

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You have to know 2 formulas to solve this type of problem.

No 1: The basic accounting equation, which is Assets = Liabilities + Owners Equity
This can be rewritten as: Owners Equity = Assets - Liabilities

No 2: The changes in equity formula, which is Beginning Owners Equity + Owner investments - Owner Withdrawals + Net Income (Revenues - Expenses) = Ending Owners Equity.
You can rewrite this equation to solve for an unknown amount.