NET INCOME QUESTION... ACCOUNTING December 31, 2012: Cash- $36,000 Accounts Rece
ID: 2378225 • Letter: N
Question
NET INCOME QUESTION... ACCOUNTING
December 31, 2012:
Cash- $36,000
Accounts Receivable- $78,750
Supplies- $18,900
Equipment- $121,500
Total Assets- $255,150
Accounts payable- $112,500
Notes Payable- $7,200
Total Liabilities-119,700
Stockholders equity- $135,450
December 31,2013:
Cash- $48,000
Accounts Receivable- $102,600
Supplies- $21,150
Equipment- $141,000
Total Assets- $312,750
Accounts payable- $89,750
Notes Payable- $30,850
Total Liabilities-120,600
Stockholders equity- $192,150
QUESTION: Lang Services raised $5000 cash through issuing additional common stock early in 2013, and it declared and paid a $17000 cash dividend in December 2013. Compute its net income or loss for 2013.
Explanation / Answer
cash from operating activity
Net income _
Less:increase in A/R (23850)
Decrease in A/p (22750)
Add:increase in notes/P 23650
Total -22950
Investing activity
Purchase of supply (2250)
Purchase of Equipment (19500)
Total -21750
Financing activity
Dividend paid (17000)
issue of Stock 56700
Total 39700
Total cash excluding income -5000
So net income is 17000
So cash from all activities 12000
Add: begining cash 36000
So, closing cash 48000
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