Question

net income for the current year $

1 The following are all changes in the account balances of Whispering Winds Ltd. during the current year, except for Retained Earnings: Cash Accounts receivable (net) Inventory Investments in FV-NI securities Increase (Decrease ) $100,000 70,000 170,000 (25,000) Accounts payable Unearned revenue Bonds payable Common shares Contributed surplus Increase (Decrease ) $175,600) 22.000 80.900 124.000 74,600 Calculate the net income for the current year, assuming that there were no entries in the Retained Earnings account except for net income and a dividend declaration of $20,500, which was paid in the current year. Net income for the current year $

Answer 1

Net income for the current year

109600

Workings:
Increase in Cash	100000
Increase in Accounts Receivable(net)	70000
Increase in Inventory	170000
Decrease in Investments	-25000
Net increase in Assets	315000
Decrease in Accounts Payable	-75600
Increase in Unearned revenue	22000
Increase in Bonds payable	80900
Increase in Common Shares	124000
Increase in Contributed surplus	74600
Net increase in Liabilities and Equity (excluding Retained Earnings)	225900
Net increase in Assets	315000
Less: Net increase in Liabilities and Equity (excluding Retained Earnings)	225900
Increase in Retained Earnings	89100
Increase in Retained Earnings	89100
Add: Dividends	20500
Net income for the current year	109600