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Shep Company’s records show the following information for the current year:

Beginning of year End of year
Total assets $ 53,200 $ 84,000
Total liabilities $ 23,600 $ 36,600

Determine net income (loss) for each of the following separate situations. (For all requirements, losses should be entered with a minus sign.)

a. Additional common stock of $4,600 was issued, and dividends of $8,600 were paid during the current year.
b. Additional common stock of $15,400 was issued, and no dividends were paid during the current year.
c. No additional common stock was issued, and dividends of $13,600 were paid during the current year.
.

Respuesta :

anthougo

The determination of the net income for each of the following separate situations is as follows:

                      Situation A     Situation B      Situation C

Net income     $21,800          $2,400           $31,400

Data and Calculations:

                    Beginning of year        End of year

Total assets     $ 53,200                  $ 84,000

Total liabilities $ 23,600                  $ 36,600

Situation A:

Common Stock issued = $4,600

Dividend paid = $8,600

                    Beginning of year        End of year

Total assets     $ 53,200                  $ 84,000

Total liabilities $ 23,600                  $ 36,600

Equity               $29,600                    $47,400

Common Stock issued                          4,600

Dividend paid                                       (8,600)

Net Income = Ending Equity - Beginning Equity - Additional stock + Dividend Paid)

$21,800 ($47,400 - $29,600 - 4,600 + 8,600)

Situation B:

Common Stock issued = $15,400

                    Beginning of year        End of year

Total assets     $ 53,200                  $ 84,000

Total liabilities $ 23,600                  $ 36,600

Equity               $29,600                    $47,400

Common Stock issued                        15,400

Dividend paid                                      

Net Income = Ending Equity - Beginning Equity - Additional stock + Dividend Paid)

$2,400 ($47,400 - $29,600 - 15,400)

Situation C:

Dividends paid = $13,600

                    Beginning of year        End of year

Total assets     $ 53,200                  $ 84,000

Total liabilities $ 23,600                  $ 36,600

Equity               $29,600                    $47,400

Common Stock issued                        

Dividend paid                                    $13,600

Net Income = Ending Equity - Beginning Equity - Additional stock + Dividend Paid)

$31,400 ($47,400 - $29,600 + 13,600)

Learn more about determining net income from equity at https://brainly.com/question/11110287

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