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    stucknaccount's Avatar
    stucknaccount Posts: 1, Reputation: 1
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    #1

    Oct 13, 2010, 11:08 PM
    Trying to find net income... help
    Question is... Dec 31, 2010 total assests 400,000 liabilities 250,000 begin business on jan 2010 with invest of 100,000 with drawings of 15,000 for the year... so how do u get the net income from this?? I am so puzzled please help.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Oct 14, 2010, 11:29 AM

    Assets = liabilities + Owners Equity

    Owners Equity = Net Income - Dividends or Drawings.

    You need to combine the two equations together and solve for net income.

    Assets = Liabilities + Owners Equity + Net Income - Dividends.

    therefore Net Income = Assets - Liabilities - Owners Equity + Dividends
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