Question

At December 31, 20X5, Salo Corp.'s balance sheet accounts increased by the following amounts compared with those at the end of the prior year: Assets $178,000 Liabilities 54,000 Capital stock 120,000 Additional paid-in capital 12,000 The only charge to retained earnings during 20X5 was for a dividend payment of $26,000. Net income for 20X5 amounted t

Answer 1

$18000

Step-by-step explanation:

Owners Equity of the year = 124,000

Contributed capital = APIC+Capital stock

Increase in contributed capital = 120,000+12,000= 132,000

Firm pays dividend of 26,000

Contributed capital+ NI- Dividend = Final Equity

132,000 + NI - 26,000 = 124,000

NI = 124,000-132,000+26,000

NI = 18,000