Presented below are changes in all the account balances of Fritz Reiner Furnitur

Question

Presented below are changes in all the account balances of Fritz Reiner Furniture Co. during the current year, except for retained earnings.

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Compute the net income for the current year, assuming that there were no entries in the Retained Earnings account except for net income and a dividend declaration of $26,830 which was paid in the current year.

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Cash $69,540 Accounts Payable $(52,700 ) Accounts Receivable (net) 51,580 Bonds Payable 84,190 Inventory 134,000 Common Stock 125,200 Investments (47,520 ) Paid-In Capital in Excess of Par—Common Stock 15,580

Explanation / Answer

Total Assets Cash 69540 Accounts Receivables 51580 Inventory 134000 Investments -47520 Total 207600 Total Liabilities & Shareholders Equity Accounts Payable -52700 Bonds Payable 84190 Common Stock 125200 Paid in Capital 15580 Total 172270 Retained Earnings = Total Assets - Liabilities 207600-172270 35330 Net Income = Retained Earnings+ Dividends 35330+26830 62160 The Net Income is $ 62160

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