Question

Required information [The following information applies to the questions displayed below.) The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2018 and 2019. December 31 2018 Cash $ 49,192 Accounts receivable26,702 Office supplies 4,212 Office equipment 129,298 Trucks 50,596 Building 0 Land 0 Accounts payable 70,200 Note payable 0 2019 $ 8,629 20,934 3,085 137, 727 59,596 168, 666 42,089 34,817 110, 755 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 and withdrew $40,800 cash for personal use. Equity, December 31, 2018 Equity, December 31, 2019

Answer 1

2.

For 2018

Beginning assets = Cash + Accounts receivable + Office supplies + Equipment + Trucks

= 49,192 + 26,702 + 4,212 + 129,298 + 50,596

= $260,000

Beginning liabilities = Accounts payable

= $70,200

Beginning equity = Beginning assets - Beginning liabilities

= 260,000 - 70,200

= $189,800

For 2019

Ending assets = Cash + Accounts receivable + Office supplies + Equipment + Trucks + Building + Land

= 8,629 + 20,934 + 3,085 + 137,727 + 59,596 + 168,666 + 42,089

= $440,726

Ending liabilities = Accounts payable + Note payable

= 34,817 + 110,755

= $145,572

Ending equity = Beginning assets - Beginning liabilities

= 440,726 - 145,572

= $295,154

Equity, December 31, 2018	189,800
Net income	110,154
Additional investment	36,000
	335,954
Withdrawal	-40,800
Equity, December 31, 2019	$295,154

Equity, December 31, 2019 = Equity, December 31, 2018 + Net income + Additional investment - Withdrawal

295,154 = 189,800 + Net income + 36,000 - 40,800

Net income = $110,154

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