Four different companiesIowa, Nevada, Ohio, and Texasshow the same balance sheet data at the beginning and end

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Four different companies—Iowa, Nevada, Ohio, and Texas—show the same balance sheet data at the beginning and end of a year. These data, exclusive of the amount of stockholders’ equity, are summarized as follows:


Four different companies—Iowa, Nevada, Ohio, and Texas—show the same balance


On the basis of the preceding data and the following additional information for the year, determine the net income (or loss) of each company for the year.

Company Iowa: No additional capital stock was issued, and no dividends were paid.
Company Nevada: No additional capital stock was issued, but dividends of $20,000 were paid.
Company Ohio: Capital stock of $75,000 was issued, but no dividends were paid.
Company Texas: Capital stock of $75,000 was issued, and dividends of $20,000 werepaid.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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