A tabular analysis of the transactions made during August 2017 by Ivanhoe Compan

Question

A tabular analysis of the transactions made during August 2017 by Ivanhoe Company during its first month of operations is shown below. Each increase and decrease in stockholders' equity is explained Assets -Liabilities Stockholders' Equity Cash A/R Supp. Equip. Accounts Payable+ Common Stock+ Retained Earnings Revenues Expenses- Dividends (1) $21,700 (2) 1,000 $21,700 Com. Stock $5,000 $4,000 -950 $950 (4) 3,100 $6,200 (5) 2,200 (6) -1,900 (7)-730 $9,300 Serv. Rev -2,200 -$1,900 Div. -$730 Rent Exp 550 -550 (9) 3,700 (10) -3,700 -370 Salar. Exp. Util. Exp. 370 (b) Determine how much stockholders' equity increased for the month. Increase in stockholders' equitys (c) Compute the net income for the month. The net income s

Explanation / Answer

b Increase in stockholders' equity = 21700+(9300-730-3700-370)-1900= 24300 c Net income = (9300-730-3700-370)= 4500

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