Question: Please kindly help me with this two questions. Co.C and Co.DThank you L Calculate Net Income in each separate scenario: Total Assets Total Liabilities Beg.
Please kindly help me with this two questions. Co.C and Co.DThank you

L Calculate Net Income in each separate scenario: Total Assets Total Liabilities Beg. of year $315,000 $132,000 End of year $582,000 $255,000 Co. A No additional capital stock was issued, and no dividends were paid Co. B No additional capital stock was issued, but dividends of $30,000 were paid out. Co. C Capital stock of $ 45,000 was issued, but no dividends were paid. Co. D Capital stock of $45,000 was issued, and dividends of $30,000 were paid. Assets Liabilities + Equity 11 11 $315,000 132,000 + 183,000 582,000 = 255,000 + 327,000 Increase in equity is: $144,000 The increase in equity can be attributable to two things: a) Increase in stock b) Increase in Retained Earnings (R/E) which is attributable to Net Income (NI) minus Dividends Co. A---Since the increase is only attributable to an increase in R/E, that means that NI was $144,000. Co. B-Since the increase is only attributable to an increase in R/E and dividends of $30,000 were paid then the following equation is used: Beg. R/E + NI - Dividends = Ending R/E NI - 30,000 = 144,000 NI = $174,000 Co. C- Co. D
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
