Exercise $2\mathrm{.}16$

LO $2-2,2-3$

Calculate net income $($or loss$)$ using the accounting equation At the beginning of the current fiscal year, the balance sheet for Davis Co$.$ showed liabilities of $$160,000.$ During the year, liabilities decreased by $$9,000,$ assets increased by $$33,000,$ and paid$-$in capital increased from $$15,000$ to $$96,000.$ Dividends declared and paid during the year were $$12,000.$ At the end of the year, stockholders' equity totaled $$215,000.$

Required:

Calculate net income $($or loss$)$ for the year.

$($Hint: Set up an accounting equation for the beginning of the year, changes during the year, and at the end of the year. Enter known data and solve for the unknowns. Remember, net income $[$or loss$]$ may not be the only item affecting retained earnings.$)$