Question

Required information

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The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2018 and 2019.

December 31	2018			2019
Cash	$	49,570		$	8,765
Accounts receivable		26,907			21,096
Office supplies		4,244			3,109
Office equipment		130,293			138,786
Trucks		50,986			59,986
Building		0			169,963
Land		0			42,411
Accounts payable		70,740			35,085
Note payable		0			112,374

2. Compute net income for 2019 by comparing total equity amounts for these two years and using the following information: During 2019, the owner invested $32,000 additional cash in the business (in exchange for common stock) and the company paid a $33,600 cash dividend.

Answer 1

Total equity amounts
			2018	2019
Assets:
Cash			49570	8765
Accounts receivable		26907	21096
Office supplies		4244	3109
Office equipment		130293	138786
Trucks			50986	59986
Building			0	169963
Land			0	42411
Total assets		262000	444116
Less: Liabilities
Accounts payable		70740	35085
Notes payable		0	112374
Total Equity amount		191260	296657
Ending equity balance	296657
Less: Capital introduced	-32000
Add: Dividend paid		33600
Net			298257
Less: Beginning equity balance	191260
Net Income		106997