The accounting records of Nettle Distribution show the following assets and liabilities as of December 31 for Year 1 and Year 2. December 31 Cash Accounts receivable Office supplies Year 2 $ 6,425 18,318 2,699 120,511 Year 1 $ 43,043 23,364 3,686 Office equipment 113,136 Trucks 44,271 53,271 Building 0 147,583 Land 0 36,828 Accounts payable Note payable 61,425 $0,465 0 84,411 2. Compute net income for Year 2 by comparing total equity amounts for these two years and using the following information: During Year 2, the owner invested $32,000 additional cash in the business in exchange for common stock, and the company paid a $39,600 cash dividend. Equity, December 31, Year 1 Add: Owner's investment Add: Net income Less: Dividends 32,000 32,000 39,600 Equity, December 31, Year 2 $ (7,600)
The accounting records of Nettle Distribution show the following assets and liabilities as of December 31 for Year 1 and Year 2. December 31 Cash Accounts receivable Office supplies Year 2 $ 6,425 18,318 2,699 120,511 Year 1 $ 43,043 23,364 3,686 Office equipment 113,136 Trucks 44,271 53,271 Building 0 147,583 Land 0 36,828 Accounts payable Note payable 61,425 $0,465 0 84,411 2. Compute net income for Year 2 by comparing total equity amounts for these two years and using the following information: During Year 2, the owner invested $32,000 additional cash in the business in exchange for common stock, and the company paid a $39,600 cash dividend. Equity, December 31, Year 1 Add: Owner's investment Add: Net income Less: Dividends 32,000 32,000 39,600 Equity, December 31, Year 2 $ (7,600)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vikram Bhai
Transcribed Image Text:The accounting records of Nettle Distribution show the following assets and liabilities as of December 31 for Year 1 and
Year 2.
December 31
Cash
Accounts receivable
Office supplies
Year 2
$ 6,425
18,318
2,699
120,511
Year 1
$ 43,043
23,364
3,686
Office equipment
113,136
Trucks
44,271
53,271
Building
0
147,583
Land
0
36,828
Accounts payable
Note payable
61,425
0
0,465
84,411
2. Compute net income for Year 2 by comparing total equity amounts for these two years and using the following information: During
Year 2, the owner invested $32,000 additional cash in the business in exchange for common stock, and the company paid a $39,600
cash dividend.
Equity, December 31, Year 1
Add: Owner's investment
Add: Net income
Less: Dividends
32,000
32,000
39,600
Equity, December 31, Year 2
$
(7,600)
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