$1$

Required information

E$1-4($Seatic$)$ Completing a Balance Sheet and inderring Net income $[$LO $1-2,$ LO $1-3]$

$[$The following information applies to the ovestions dipliyed below$]$

Ken Young and Kim Shenwood orpanized Reader Direct as a corporation, each contibuted $$49,000$ cash so start the butiness and necelved $4,000$ shares of stock. The store completed its frst year of aperations on December $31,2020.$ On That date. the following financial Bems for the year were desemined cash on hand and in the bank, $$47,500$; amounds dive from customers from sules of books, $$26,900$; equipment, $$4,8,090$ : amourts ewed to publishers for books purchased, $$3\mathrm{.}000$ cene$-$year notes payable to a local bank for $$2,850.$ No dividender were declared or paid to the stockholiders during the year.

E$1-4($Static$)$ Part $2$

$2.$ Using the retained eamings equasion and an epening balance of $$0,$ work backwards to compute the amount of net income for the year ended December $3$t$.2020.$