Question
Carlos Ramirez and Camila Garza organized New World Book Store as a corporation; each contributed $71,800 cash to start the business and received 5,400 shares
Carlos Ramirez and Camila Garza organized New World Book Store as a corporation; each contributed $71,800 cash to start the business and received 5,400 shares of common stock. The store completed its first year of operations on December 31, 2014. On that date, the following financial items for the year were determined: December 31, 2014, cash on hand and in the bank, $69,250; December 31, 2014, amounts due from customers from sales of books, $42,000; unused portion of store and office equipment, $79,000; December 31, 2014, amounts owed to publishers for books purchased, $12,200; one-year note payable to a local bank for $3,100, with interest due of $180. No dividends were declared or paid to the stockholders during the year.
Q- What was the amount of net income for the year? (Hint: Use the retained earnings equation [Beginning Retained Earnings + Net Income Dividends = Ending Retained Earnings] to solve for net income.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started