Question

Lexar Company began 2017 with $767,000 in assets and ended the year with $814,000 in assets. Lexar began 2017 with $628,000 in liabilities and ended the year with $287,000 in liabilities. Assuming Lexar paid $124,000 in dividends, Lexar's 2017 net income was:

Answer 1

Here, we can use accounting equation, which is : Total Assets = Total Liabilities + Total Stockholders Equity

Assets at the beginning of the year	$    767,000
Less: Liabilities at the beginning of the year	$ (628,000)
Stockholders equity at the beginning of the year	$    139,000

Assets at the End of the year	$    814,000
Less: Liabilities at the end of the year	$ (287,000)
Stockholders equity at the end of the year	$    527,000

Stockholders equity at the end of the year	$    527,000
Less: Stockholders equity at the beginning of the year	$ (139,000)
Add: Dividends	$    124,000
Net income for the year	$    512,000

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