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NET INCOME QUESTION... ACCOUNTING December 31, 2012: Cash- $36,000 Accounts Rece

ID: 2378225 • Letter: N

Question

NET INCOME QUESTION... ACCOUNTING


December 31, 2012:
Cash- $36,000
Accounts Receivable- $78,750
Supplies- $18,900
Equipment- $121,500
Total Assets- $255,150
Accounts payable- $112,500
Notes Payable- $7,200
Total Liabilities-119,700
Stockholders equity- $135,450


December 31,2013:
Cash- $48,000
Accounts Receivable- $102,600
Supplies- $21,150
Equipment- $141,000
Total Assets- $312,750
Accounts payable- $89,750
Notes Payable- $30,850
Total Liabilities-120,600
Stockholders equity- $192,150

QUESTION: Lang Services raised $5000 cash through issuing additional common stock early in 2013, and it declared and paid a $17000 cash dividend in December 2013. Compute its net income or loss for 2013.

Explanation / Answer

cash from operating activity

Net income _

Less:increase in A/R (23850)

Decrease in A/p (22750)

Add:increase in notes/P 23650


Total -22950


Investing activity

Purchase of supply (2250)

Purchase of Equipment (19500)

Total -21750


Financing activity   

Dividend paid (17000)

issue of Stock 56700

Total 39700


Total cash excluding income -5000

So net income is 17000

So cash from all activities 12000

Add: begining cash 36000

So, closing cash 48000