Problem 1

Presented below is certain information pertaining to Messi Company.

Assets, January 1 $240,000

Assets, December 31 230,000

Liabilities, January 1 150,000

Common stock, December 31 80,000

Retained earnings, December 31 31,000

Owners equity, December 31 111,000

Common stock issued during the year 10,000

Dividends declared during the year 13,000

There are no owners equity transactions other than the stock issuance and dividend declaration. The income tax rate equals 30%. Compute the amount of net income for the year.