Question

The December 31, Year 1, balance sheet for Deen Company showed total stockholders’ equity of $73,000. Total stockholders’ equity increased by $42,500 between December 31, Year 1, and December 31, Year 2. During Year 2, Deen Company acquired $10,700 cash from the issue of common stock. Deen Company paid a $9,500 cash dividend to the stockholders during Year 2.

Required Determine the amount of net income or loss Deen reported on its Year 2 income statement.

Answer 1

$41,300

Step-by-step explanation:

The computation of the amount of the net income or loss reported is shown below:

Equity increased during the year $42,500

Less: Issue of shares acquired $(10,700)

Add: cash Dividends paid $9,500

Net income for the year $41,300

by adding the dividend and deducting the issued of shares acquired to the equity increased we can get the net income and the same is shown above