Problem 2-3A Computing net income from equity analysis, preparing a balance sheet, and computing the debt ratio L.O. C2, A1, A2, P3

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The accounting records of Fabiano Distribution show the following assets and liabilities as of December 31, 2010 and 2011.

December 31	2010	2011
Cash	$ 52,500	$ 18,750
Accounts receivable	28,500	22,350
Office supplies	4,500	3,300
Office equipment	138,000	147,000
Trucks	54,000	54,000
Building	0	180,000
Land	0	45,000
Accounts payable	7,500	37,500
Note payable	0	105,000

Late in December 2011, the business purchased a small office building and land for $225,000. It paid $120,000 cash toward the purchase and a $105,000 note payable was signed for the balance. Mr. Fabiano had to invest $35,000 cash in the business (in exchange for stock) to enable it to pay the $120,000 cash. The business also pays $3,000 cash per month for dividends.

By comparing equity amounts from the balance sheets and using the additional information presented in this problem, prepare a calculation to show how much net income was earned by the business during 2011. (Negative amounts should be indicated by a minus sign. Omit the "$" sign in your response.)

Equity, December 31, 2011	$
Equity, December 31, 2010
	$