ending equity to answer the rest of the questions Assets Liabilities Beginning o

Question

ending equity to answer the rest of the questions Assets Liabilities Beginning of Year: $28,000 19,000 End of Year: 63,000 $28,000 1) What is the equity at the beginning of the year? 2) What is the equity at the end of the year? Beginning Equity 9000 Ending Equity 3) If the company issues common stock of $8,100 and pay dividends of $37,300, how much is net income (loss)? 4) If net income is $1,300 and dividends are $6,700, how much is common stock? Net Income (Loss) Common Stock 5) If the company issues common stock of $19,900 and net income is $17,300, how much is dividends? 6) If the company issues common stock of $42,300 and pay dividends of $4,300, how much is net income (loss)? Dividends Net Income (Loss) 12/0/2017 O Type here to search

Explanation / Answer

Question 1). Solution :- Beginning equity = Beginning Assets - Beginning Liabilities.

= 28000 - 19000

= $ 9,000.

Conclusion :- Beginning equity = $ 9,000.

Question 2). Solution :- Ending equity = Ending Assets - Ending Liabilities.

= 63000 - 28000

= $ 35,000.

Conclusion :- Ending equity = $ 35,000.

Question 3). Solution :- Net income (Net loss) = (Dividend paid to common stockholders + Ending equity) - (Beginning equity + Issue of common stock during the year).

= (37300 + 35000) - (9000 + 8100)

= 72300 - 17100

= $ 55200.

Conclusion :- Net income = $ 55200.

Question 4). Solution :-

Issue of common stock during the year = (Dividend paid to common stockholders + Ending equity) - (Beginning equity + Net income).

= (6700 + 35000) - (9000 + 1300)

= 41700 - 10300

= $ 31400.

Conclusion :- Common stock = $ 31400.

Question 5). Solution :-

Dividend paid to common stockholders = Beginning equity + Net income + Issue of common stock - Ending equity.

= 9000 + 17300 + 19900 - 35000

= $ 11200.

Conclusion :- Dividend = $ 11200.

Question 6). Solution :- Net income (Net loss) = (Dividend paid to common stockholders + Ending equity) - (Beginning equity + Issue of common stock during the year).

= (4300 + 35000) - (9000 + 42300)

= 39300 - 51300

= (-) 12000 Dollar. (Negative $ 12000 represents the Net Loss)

Conclusion :- Net loss = $ 12000.

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