Question

Presented below are data for Caracas Corp.

2014 2015
Assets, January 1 $4,560 ?
Liabilities, January 1 ? $2,736
Stockholders' Equity, Jan. 1 ? 2,750
Dividends 570 646
Common Stock 608 650
Stockholders' Equity, Dec. 31 ? 1,942
Net Income 684 ?
Net income for 2015 is:

Answer 1

The net income for 2015 is $204

Step-by-step explanation:

The computation of net income is shown below:

= Beginning stock holder equity of 2015 year + difference in common stock or issue of stock - 2015 dividend - ending stockholder equity of 2015 year

where,

Beginning stock holder equity balance of 2015 year = $2,750

Difference in common stock = 2015 common stock - 2014 common stock

= 650 - 608

= 42

2015 dividend = 646

Ending stockholder equity of 2015 year = 1,942

Now, put the values on the above equation,

So,

Net income = $2,750 + $42 - $646 - $1,942

= $204

Other things are irrelevant. So, it is not be considered in the computation part.

Hence, the net income for 2015 is $204