The following information is available for Buckeye Company: January 1, 2003 Dece
ID: 2443985 • Letter: T
Question
The following information is available for Buckeye Company:January 1, 2003 December 31, 2003
Cash $25,000 $30,000
Land 40,000 42,000
Notes payable 36,000 20,000
Retained earnings 33,000 56,000
Supplies 8,000 10,000
Accounts payable 19,000 39,000
Equipment 20,000 ?
Accounts receivable 17,000 26,000
Common stock 40,000 40,000
Inventory 18,000 24,000
During 2003, Buckeye Company reported sales revenue of $98,000, salaries expense of $22,000, rent
expense of $17,000, and cost of goods sold. Additionally, Buckeye Company paid $9,000 of dividends
during 2003. (Note - the amount of cost of goods sold has been intentionally omitted from this
problem).
Calculate the amount of net income earned by Buckeye Company during 2003. Do not use decimals in
your answer.
!!Supposedly the right answer is 32,000. Please show and explain the steps in finding this.!!
Explanation / Answer
Not real tough, you just use the formula: Beginning retained earnings plus net income minus dividends equals ending retained earnings. 33,000 + x - 9,000= 56,000. x= 32,000 which is net income.
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