Ask Experts Questions for FREE Help !
Ask
    deannadunn94's Avatar
    deannadunn94 Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Aug 24, 2013, 06:24 PM
    Net Income?
    Given:
    Dec. 31, 2012 Assets: $34,000, Liabilities: $24,500

    Dec. 31, 2012 Assets: $40,000 Liabilities: $26,500

    During 2013: Stock insurances $1,400
    Net income (loss): ?
    Cash dividends: $2,000\

    Find net income for 2013?

    What I did was: $40,000= $34,000 + $1,400 + ? - $2,000= $6,600

    But I got the wrong answer... help please? I've tried everything.
    deannadunn94's Avatar
    deannadunn94 Posts: 2, Reputation: 1
    New Member
    		  
    #2

    Aug 24, 2013, 06:51 PM
    I see that I did it wrong: correct answer:

    13,500= 12500 + 1400 - 2000= 11900
    13500 - 11900= 1600 which is the net income
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
    		  
    #3

    Aug 26, 2013, 06:18 AM
    First you have to find your owners equity amounts for both the beginning and ending amounts. Then you have to account for the change in the two amounts.

    So to find owners equity, the formula is:
    Assets - Liabilities = Owners Equity

    Now for the change in owners equity the formula is:
    Beginning owners equity + stock issuances + net income - cash dividends = Ending Owners Equity.

    Rewritten as:
    Net Income = Ending Owners Equity - Beginning Owners Equity - Stock Issuances + Cash Dividends
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Determine net profit from net income and net sales [ 1 Answers ]

Net Income 5,390 Net Sales 44,830 - what is the net profit

Compute the amount of net income or net loss for this first month of operations. [ 1 Answers ]

a. Barlow deposited $10,000 cash in a business bank account, and the corporation issued common stock to him. b. Borrowed $5,000 cash from the bank and signed a note payable due within 1 year. c. Paid $300 cash for supplies. d. Purchased advertising in the local newspaper for cash, $800. e....

Determining net loss/net income from the end of period spreadsheet [ 3 Answers ]

In the end of period spreadsheet/worksheet for the current year, the Debit total is $436,700 and the credit total is $523,550. What is the amount of net loss or net income in preparing the income statement from the end-of-period spreadsheet?

Computing net income or net lose [ 1 Answers ]

On December 1, Doris Tuner opened a speech and hearing clinic. During December, her firm had the following transactions involving and expenses. Did the firm earn a net income or incur a net loss for the period? What was the amount? Paid $2,600 for advertising. Provided services for $2,300 in...

Consolidated Net Income Net Adjustment [ 3 Answers ]

I sure could use some help here. Dunn Corporation owns 100% of Grey Corporation’s common stock. On January 2, 2001, Dunn sold to Grey, for $40,000, machinery with a carrying amount of $30,000. Grey is depreciating the acquired machinery over a five-year life by the straight-line method. The net...

View more questions Search