Question

Required information [The following information applies to the questions displayed below.) Part 2 of 3 The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2018 and 2019. 2.5 points December 31 Cash Accounts receivable Office supplies Office equipment Trucks Building Land Accounts payable Note payable 2018 $ 43,611 23,672 3,734 114,628 44,855 2019 $ 6,629 18,559 2,735 122, 100 53,855 149,529 37,314 30,867 86,843 eBook 62,235 0 Print 2. Compute net income for 2019 by comparing total equity amounts for these two years and using the following information: During 2019, the owner invested $36,000 additional cash in the business (in exchange for common stock) and the company paid a $48,000 cash dividend. Equity, December 31, 2018 Equity, December 31, 2019

Answer 1

Step 1: Calculation of Equity on December 31, 2018: V2 VÀ Total Assets for 2018: Cash Accounts Receivable Office Supplies Office Equipment Trucks Building Land Total Assets 43,611.00 23,672.00 3,734.00 114,628.00 44,855.00 2 2 2 2 2| 230,500.00 | Total Liabilities for 2018: Accounts Payable Total Liabilities 62,235.00 62,235.00 Total Equity on December 31, 2018 = Total Assets - Total Liabilities = $230,500 - $62,235 = $168,265.00

Step 2: Calculation of Equity on December 31, 2019: Total Assets for 2019: Cash Accounts Receivable Office Supplies Office Equipment Trucks Building Land Total Assets A A A 6,629.00 18,559.00 2,735.00 122,100.00 53,855.00 149,529.00 37,314.00 390,721.00 A Total Liabilities for 2019: Accounts Payable Note Payable Total Liabilities 30,867.00 86,843.00 117,710.00 TAI Total Equity on December 31, 2019 = Total Assets - Total Liabilities = $390,721 - $117,710 = $273,011.00

Calculation of Net Income for 2019: Total Equity on December 31, 2019 Less: Additional Contributed Capital Add: Dividend Paid les les $273,011.00 (36,000.00) $237,011.00 48,000.00 285,011.00 (168,265.00) 116,746.00 Less: Total Equity on December 31, 2018 Net Income for 2019 = $