The December 31, Year 1, balance sheet for Deen Company showed total stockholders' equity of $65,500. Total stockholders' equity increased by $33,000 between December 31, Year 1, and December 31, Year 2.

During Year 2, Deen Company acquired $13,500 cash from the Issue of common stock. Deen Company paid a $6,000 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.

Question

Business

Maia Nelson

30 June, 13:25

The December 31, Year 1, balance sheet for Deen Company showed total stockholders' equity of $65,500. Total stockholders' equity increased by $33,000 between December 31, Year 1, and December 31, Year 2.

During Year 2, Deen Company acquired $13,500 cash from the Issue of common stock. Deen Company paid a $6,000 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.

+4

Answers (1)

Know the Answer?

Darren Reynolds · Answer 1

Consider the following explanation

Explanation:

Stockholder's Equity on December 31, Year 2 = Stockholder's Equity on December 31, Year 1 + Net income - Dividends + Shares Issued

Net Income = Stockholder's Equity on December 31, Year 2 - Stockholder's Equity on December 31, Year 1 + Dividends - Shares Issued

= ($ 33,000 + $ 65,500) - $ 65,500 + $ 6000 - $ 13,500

= $ 25,500

Hence the correct answer is $ 25,500