Asset, Liability and stockholder equity. Please help me solve asap! At the begin
ID: 2421364 • Letter: A
Question
Asset, Liability and stockholder equity. Please help me solve asap!
At the beginning of the current fiscal year, the balance sheet for Davis Co. showed liabilities of $640,000. During the year liabilities decreased by $36,000, assets increased by $130,000, and paid-in capital increased from $60,000 to $384,000. Dividends declared and paid during the year were $50,000. At the end of the year, stockholders' equity totaled $858,000. Calculate net income (or loss) for the year. (Negative amounts should be indicated by a minus sign.)Explanation / Answer
Working
Total Stockholders Equity at the end = 858000
PIC at the end + RE at the end = Total Stockholders Equityat the end
384000 + REat the end = 858000
RE at the end = 858000-384000
RE at the end = 474000
RE at the beginning =RE at the end + Dividend Paid
RE at the beginning = 474000+50000
RE at the beginning = 524000
Total liability & Stock holder Equity = Total Asset
At beginning
Total Asset = Liabilities + Stockholders Equity
Total Asset = 640000 + (60000+524000)
Total Asset = 1224000
At the end
Total Asset = 1224000 + 130000 = 1354000
Stockholders Equity Assets = Liabilities + PIC + RE Beginning 1224000 = 640000 + 60000 + 524000 Changes 130000 = -36000 + 324000 + -50000 Ending 1354000 = 604000 + 384000 + 474000