Compute net income for 2019 by comparing total equity amounts for these two years and using the following information: During 2019, the owner invested $33,000 additional cash in the business (in exchange for common stock) and the company paid a $36,000 cash dividend.

Equity, December 31, 2018

Equity, December 31, 2019

The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2018 and 2019.

December 31 2018 2019

Cash $55,530 $10,900

Accounts receivable 30,142 23,632

Office Supplies 4,755 3,483

Office equipment 145,958 155,473

Trucks 57, 115 66, 115

Building 0 190, 398

Land 0 47,511

Accounts payable 79,245 39,303

Note payable 0 137,909

Question

Business

Mosley

19 March, 17:09

Compute net income for 2019 by comparing total equity amounts for these two years and using the following information: During 2019, the owner invested $33,000 additional cash in the business (in exchange for common stock) and the company paid a $36,000 cash dividend.

Equity, December 31, 2018

Equity, December 31, 2019

The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2018 and 2019.

December 31 2018 2019

Cash $55,530 $10,900

Accounts receivable 30,142 23,632

Office Supplies 4,755 3,483

Office equipment 145,958 155,473

Trucks 57, 115 66, 115

Building 0 190, 398

Land 0 47,511

Accounts payable 79,245 39,303

Note payable 0 137,909

+1

Answers (1)

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Rose · Answer 1

net income during 2019 = $109,045

Explanation:

total stockholder equity 2018 = assets - liabilities = $293,500 - $79,245 = $214,255

total stockholder equity 2019 = assets - liabilities = $497,512 - $177,212 = $320,300

change in equity from 2018 to 2019 = $106,045

$33,000 can be explained by additional capital invested, and the remaining $73,045 corresponds to change in retained earnings

change in retained earnings = net income - dividends distributed

$73,045 = net income - $36,000

net income = $109,045