Chapter 1, Problem 1.21E

Using the accounting equation

Green City Builders’ balance sheet data at May 31, 2016, and June 30, 2016, follow:

	May 31,2016	June 30, 2016
Total assets	$ 188,000	$244,000
Total liabilities	122,000	88,000

For each of the following situations with regard to common stock and dividends of a corporation, compute the amount of net income or net loss during June 2016.

1. a. The company issued $7,500 of common stock and paid no dividends.
2. b. The company issued no common stock. It paid cash dividends of $13,000.
3. c. The company issued $20,000 of common stock and paid cash dividends of $18,000.