[izpiz]

Ken Young and Kim Sherwood organized Reader Direct as a corporation; each contributed $47,000 cash to start the business and received 4,000 shares. The store completed its first year of operations on December 31, 2011. On that date, the following financial items for the year were determined: cash on hand and in the bank, $49,000; amounts due from customers from sales of books, $25,000; property and equipment, $48,000; amounts owed to publishers for books purchased, $7,700; one-year note payable to a local bank for $2,600. No dividends were declared or paid to the shareholders during the year.

Using the retained earnings equation and an opening balance of $0, work backward to compute the amount of net income for the year ended December 31, 2011.

[paraclete]

what help do you need?

Assets - Liabilities = Equity

so you know the starting equity and the balances on the various asset and liability accounts; the difference represents earnings