A company has the following account balances at the beginning of the year:

• Cash: $10,000
• Accounts Receivable: $5,000
• Inventory: $12,000
• Accounts Payable: $8,000
• Long-term Debt: $20,000
• Common Stock: $15,000
• Retained Earnings: $19,000

During the year, the company makes the following transactions:

• Sells goods on credit for $30,000
• Collects $25,000 in accounts receivable
• Purchases $20,000 worth of inventory on credit
• Pays $18,000 to suppliers for inventory purchased on credit
• Pays $5,000 in interest on long-term debt
• Issues $10,000 in new common stock

Calculate the company's net income and ending balance of cash at the end of the year.

Answer rating: 100% (QA)

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