At the beginning of the current fiscal year, the balance sheet of Cummings Co. s
ID: 2346977 • Letter: A
Question
At the beginning of the current fiscal year, the balance sheet of Cummings Co. showed liabilities of $219,000. During the year, liabilities decreased by $36,000; assets increased by $77,000; and paid-in capital also increased by $10,000 to $190,000. Dividends declared and paid during the year were $62,000. At the end of the year, owners' equity totaled $379,000.Required:
Calculate net income or loss for the year. (Negative amount should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
OE
A = L + PIC + RE
Beginning $ = $ + $ + $
Changes = + +
= + +
Ending $ = $ + $ + $
Explanation / Answer
A = L + PIC + RE
Beginning …… $ (5) $219,000 (4) (6)
Changes……… +77,000 -36,000 +10,000 + (7) Net income
-62,000 Dividends
Ending………. (3) = (2) + $190,000 + 1) $379,000 OE
Steps: Short-cut approach:
1. $379,000 - $190,000 = $189,000 77,000 = - $36,000 + $10,000
2. $219,000 - $36,000 = $183,000 + Net income - $62,000
3. $183,000 + $379,000 = $562,000 Net income = $165,000
4. $190,000 - $10,000 = $180,000
5. $562,000 - $77,000 = $485,000
6. $485,000 - $219,000 - $180,000 = $86,000
7. $86,000 + Net income - $62,000 = $189,000
Net income = $165,000
A = L + PIC + RE
Beginning …… $ (5) $219,000 (4) (6)
Changes……… +77,000 -36,000 +10,000 + (7) Net income
-62,000 Dividends
Ending………. (3) = (2) + $190,000 + 1) $379,000 OE
Steps: Short-cut approach:
1. $379,000 - $190,000 = $189,000 77,000 = - $36,000 + $10,000
2. $219,000 - $36,000 = $183,000 + Net income - $62,000
3. $183,000 + $379,000 = $562,000 Net income = $165,000
4. $190,000 - $10,000 = $180,000
5. $562,000 - $77,000 = $485,000
6. $485,000 - $219,000 - $180,000 = $86,000
7. $86,000 + Net income - $62,000 = $189,000
Net income = $165,000
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