Question

What are the formulas to find the required information

Using the expanded accounting equation, calculate and enter the answers for each question. You will need to use the answers you calculate for beginning and ending equity to answer the rest of the questions. Assets Liabilities Beginning of Year: $27,000 $16,000 End of Year: $63,000 $28,000 1) What is the equity at the beginning of the year? 2) What is the equity at the end of the year? Beginning Equity 11000 Ending Equity 35000 3) If the company issues common stock of $7,400 and pay dividends of $42,000, how much is net income (loss)? 4) If net income is $1,300 and dividends are $9,500, how much is common stock? Net Income (Loss) Common Stock 5) If the company issues common stock of $15,000 and net income is $18,200, how much is dividends? 6) If the company issues common stock of $42,900 and pay dividends of $1,700, how much is net income (loss)? Dividends Net Income (Loss)

Answer 1

Part 3)

The value of net income (loss) is arrived as below:

Ending Equity = Beginning Equity + Net Income - Dividends + Common Stock

Substituting values in the above equation, we get,

35,000 = 11,000 + Net Income - 42,000 + 7,400

Rearranging values, we get,

Net Income (Loss) = 35,000 - 11,000 + 42,000 - 7,400 = $58,600

_____

Part 4)

The value of common stock is determined as follows:

Ending Equity = Beginning Equity + Net Income - Dividends + Common Stock

Substituting values in the above equation, we get,

35,000 = 11,000 + 1,300 - 9,500 + Common Stock

Rearranging values, we get,

Common Stock = 35,000 - 11,000 - 1,300 + 9,500 = $32,200

_____

Part 5)

The value of dividends is calculated as below:

Ending Equity = Beginning Equity + Net Income - Dividends + Common Stock

Substituting values in the above equation, we get,

35,000 = 11,000 + 18,200 - Dividends + 15,000

Rearranging values, we get,

Dividends = 11,000 + 18,200 + 15,000 - 35,000 = $9,200

_____

Part 6)

The value of net income (loss) is derived as below:

Ending Equity = Beginning Equity + Net Income - Dividends + Common Stock

Substituting values in the above equation, we get,

35,000 = 11,000 + Net Income - 1,700 + 42,900

Rearranging values, we get,

Net Income (Loss) = 35,000 - 11,000 + 1,700 - 42,900 = -$17,200