Question

tabular analysis of the transactions made during August 2022 by Crane Company during its first month of operations is shown below. Each increase and decrease in stockholders' equity is explained. Assets - Liabilities + Stockholders'Equity Cash Common Stock + NRSupp. Equip - Accounts Payable - Common Stock + Retained Earnings Revenues - Expenses - Dividends 1 $23.500 $23.500 $4.900 $700 2 3. 4. 5. 6 $10.900 Serv. Rev. - 1.200 -700 4,700 56,200 -2,300 -2.100 -830 450 450 - 2.100 -$2.100 Rent Exp - $830 8. Salar Exp -2.100 -310 Util. Exp b) Determine how much stockholders' equity increased for the month. Increase in stockholders equity Compute the net income for the month The net income

Answer 1

b.

Increase in stockholders' equity = Revenue - Expenses - Dividend

= 10,900 - 830 - 2,100 - 310 - 2,100

= $5,560

c.

Net income = Service revenue - Rent expense - Salaries expense - Utilities expense

= 10,900 - 830 - 2,100 - 310

= $7,660

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