The Balance Sheet Equation

The Arcadia Company reported the following financial results during its first two years of operations:

Year End

Assets

=

Liabilities

+ Shareholders'

Equity

Year 1 $65,000 = $60,000 + $5,000

Year 2 70,000 = 40,000 + 30,000

Assuming that no dividends were declared and that no additional capital was invested in Year 2, determine Arcadia's net income (or loss) for Year 2.