Financial Accounting

Exercises:

1)Please show your calculation of Net Income in each separate case and once you have come up with a value verify that it is correct by preparing the Statement of Retained Earnings

Calculate Net Income in each separate scenario:

Total AssetsTotal Liabilities

Beg. of year$315,000 $132,000

End of year $582,000 $255,000

Co. ANo additional capital stock was issued, and no dividends were paid

Co. BNo additional capital stock was issued, but dividends of $30,000 were paid out.

Co. CCapital stock of $145,000 was issued, but no dividends were paid.

Co. DCapital stock of $45,000 was issued, and dividends of $30,000 were paid.

Assets=Liabilities+ Equity

$315,000=132,000+ 183,000

582,000=255,000+ 327,000

Increase in equity is:$144,000