Completing a Balance Sheet and Inferring Net Income

Carlos Ramirez and Camila Garza organized New World Book Store as a corporation; each contributed

$70,000 cash to start the business and received 4,000 shares of common stock. The store completed its first

year of operations on December 31, 2011. On that date, the following financial items for the year were

determined: December 31, 2011, cash on hand and in the bank, $68,350; December 31, 2011, amountsdue from customers from sales of books, $39,000; unused portion of store and office equipment, $72,000; December 31, 2011, amounts owed to publishers for books purchased, $12,000; one-year note payable to a local bank for $3,000. No dividends were declared or paid to the stockholders during the year. Required: 1. Complete the following balance sheet as of the end of 2011. 2. 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.) Assets Liabilities Cash $ Accounts payable $ Accounts receivable Note payable Store and office equipment Interest payable 120 Total liabilities $ Stockholders Equity Contributed capital Retained earnings 24,230 Total stockholders equity Total assets $ Total liabilities and stockholders equity $