Question

At the beginning of the current fiscal year, the balance sheet of Hughey Inc. showed stockholders' equity of $529,000. During the year, liabilities increased by $28,000 to $222,000; paid-in capital increased by $31,000 to $173,000; and assets increased by $257,000. Dividends declared and paid during the year were $48,000.

Required:
Calculate net income or loss for the year.
Stockholders’ Equity
Assets = Liabilities + PIC + RE
Beginning = + + $260,000 SE
Changes 130,000 = 11,000 + 20,000 +
Ending = $116,000 + $90,000 +

Answer 1

See below

Step-by-step explanation:

Given the above information, We know that

Assets = Liabilities + equity

Beginning assets = ($222,000 - $28,000) + $529,000 = $723,000

Ending assets = $723,000 + $257,000 = $980,000

Ending equity = Ending asset - Ending liabilities = $980,000 - $222,000 = $758,000

Beginning equity = Beginning paid in capital + retained earnings

Beginning retained earnings = $529,000 - ($173,000 - $31,000)

= $529,000 - $142,000

= $387,000

Ending equity = Ending paid in capital + retained earnings

Ending retained earnings = $758,000 - $173,000 = $585,000

Ending retained earnings = Beginning retained earnings + net income - dividend

$585,000 = $387,000 + Net income - $48,000

Net income = $585,000 - $387,000 + $48,000

Net income = $248,000