During 2014, Serenity Creek Spa reported revenue of $ 21,000. Total expenses for the year were $

Question:

During 2014, Serenity Creek Spa reported revenue of $ 21,000. Total expenses for the year were $ 14,000. Serenity Creek Spa ended the year with total assets of $ 30,000, and it owed debts totaling $ 14,000. At year- end 2013, the business reported total assets of $ 23,000 and total liabilities of $ 14,000.

Requirements

1. Compute Serenity Creek Spa’s net income for 2014.

2. Did Serenity Creek Spa’s stockholders’ equity increase or decrease during 2014? By how much?