Ken Young and Kim Sherwood organized Reader Direct as a corporation; each contributed $48,000 cash to start the business and received 4,000 shares of stock. The store completed its first year of operations on December 31, 2020. On that date, the following financial items for the year were determined: cash on hand and in the bank, $43,500; amounts due from customers from sales of books, $27,800; equipment, $47,000; amounts owed to publishers for books purchased, $8,300; one-year notes payable to a local bank for $4,200. No dividends were declared or paid to the stockholders during the year. Using the retained earnings equation and an opening balance of $0, work backwards to compute the amount of net income for the year ended December 31, 2020.
Ken Young and Kim Sherwood organized Reader Direct as a corporation; each contributed $48,000 cash to start the business and received 4,000 shares of stock. The store completed its first year of operations on December 31, 2020. On that date, the following financial items for the year were determined: cash on hand and in the bank, $43,500; amounts due from customers from sales of books, $27,800; equipment, $47,000; amounts owed to publishers for books purchased, $8,300; one-year notes payable to a local bank for $4,200. No dividends were declared or paid to the stockholders during the year.
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Using the
retained earnings equation and an opening balance of $0, work backwards to compute the amount of net income for the year ended December 31, 2020.
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