5 Check my work 4 The December 31, Year 1, balance sheet for Deen Company showed

Question

5 Check my work 4 The December 31, Year 1, balance sheet for Deen Company showed total stockholders' equity of $73,000. Total stockholders' equity increased by $42,000 between December 31, Year 1, and December 31, Year 2. During Year 2, Deen Company acquired $10,500 cash from the issue of common stock. Deen Company paid a $8,500 cash dividend to the stockholders during Year 2. 10 points Required Determine the amount of net income or loss Deen reported on its Year 2 income statement. (Hint Remember that stock issues, net income, and dividends all change total stockholders' equity.) eBook Print References

Explanation / Answer

Stockholder's Equity on 31 December , Year 2 = Stockholder's Equity on 31 December , Year 1 + Shares Issued + Net Income - Dividends

Net Income = Stockholder's Equity on 31 December , Year 2 -  Stockholder's Equity on 31 December , Year 1 - Shares Issued + Dividends

= ( $ 73,000 + $ 42,000) - $ 73,000 - $ 10,500 + $ 8,500

= $ 40,000

Hence the correct answer is $ 40,000

Related Questions

Navigate

• Browse (All)
• Browse 5
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.