Question

a. Ivanhoe Corporation reported the following selected information for the two years ended December 31:

		2017			2018
Total assets		$560,000			$630,000
Total liabilities		390,000			420,000

Calculate total shareholders’ equity on December 31, 2017, and 2018.

		2017		2018
Total shareholders’ equity		$		$

Calculate the change in total shareholders’ equity for the year ended December 31, 2018.

Change in shareholders’ equity

$

-what effect did this have? (increase, decrease, no effect)  

b. Ivanhoe’s shareholders’ equity consists only of common shares and retained earnings. Using the change in total shareholders’ equity calculated in above part, calculate the net income or loss for the year ended December 31, 2018, assuming each of the following independent scenarios:

1. Ivanhoe issued no common shares during the year and did not declare any dividends.

Net income or loss

$

2. Ivanhoe issued no common shares during the year and declared and paid dividends of $8,000.

Net income or loss

$

3. Ivanhoe issued $35,000 of additional common shares during the year and did not declare any dividends.

Net income or loss

$ .

4. Ivanhoe issued $20,000 of additional common shares during the year and declared and paid dividends of $8,000.

Net income or loss

$

Answer 1

a.		2017		2018
	Total shareholders’ equity	$170,000	$//img.homeworklib.com/questions/804a14c0-77aa-11ea-b452-9bab00817965.gif?x-oss-process=image/resize,w_560$	$210,000
	($560,000 - $390,000), ($630,000 - $420,000)
	Total shareholders’ equity = Total Assets - Total Liabilities
	Change in shareholders’ equity = $40,000
	($210,000 - $170,000)
	Change in shareholders’ equity from 2017 to 2018 increased by $40,000
b.
1	Net income or loss = $40,000
2	Net income or loss = $48,000
3	Net income or loss = $5,000
4	Net income or loss = $28,000