Question

Company XYZ has the following data for year 2016:                                   

Company XYZ has the following data for year 2016:

                                               1/1/2016                                 12/31/2016

Total assets                            $100,000                                $108,000

Total liabilities                      $36,000                                  $28,000

Owners contributions: $10,000

$3,000 dividend is distributed during the period.

Compute the amount of net income (or loss) for year 2016.

Please explain step by step

Business   Accounting   
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Answer #1

Total Shareholder's equity beginning balance

$ 64,000.00

Add: Capital addition

$ 10,000.00

$ 74,000.00

Less: Dividends paid

$ (3,000.00)

$ 71,000.00

Ending balance of Shareholder's equity

$ 80,000.00

Profit earned during year

$    9,000.00

1.1.2016..

12.31.2016..

Increase (Decrease)

Total assets

$ 1,00,000.00

$ 1,08,000.00

$    8,000.00

Liabilities

$      36,000.00

$      28,000.00

$ (8,000.00)

Shareholder's equity

$      64,000.00

$      80,000.00

$ 16,000.00

The amount of net income for year 2016 = $9000

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