How do I find the net income for year 2011?

December 31, 2010
Assets 35,000
Liabilities 22,500

December 31, 2011
Assets 41,000
Liabilities 27,500

During year 2011
Stock issuances 1,500
Net income ?
Cash dividends 3,000

First you need to calculate Owners Equity for 2010 and 2011.

This is part of the accounting equation, which is: Assets = Liabilities + Owners Equity, which can be rewritten as: Owners Equity = Assets - Liabilities.

Now that you know the 2 amounts of Owners equity you have to account for the change from the 2010 to the 2011 amount.

So you take your 2011 Owners Equity and subtract your 2010 Onwers Equity, then subtract your stock issuances and add back in your cash dividends to get your answer.