Question

The following are all changes in the account balances of Blue Spruce Ltd. during the current year, except for Retained Earnings:

		Increase (Decrease	)				Increase (Decrease	)
Cash		$90,000			Accounts payable		$(71,900	)
Accounts receivable (net)		65,000			Unearned revenue		25,000
Inventory		163,000			Bonds payable		77,400
Investments in FV-NI securities		(28,000	)		Common shares		128,000
					Contributed surplus		70,900

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 $19,700, which was paid in the current year.

Net income for the current year

$enter the Net income for the current year in dollars

Answer 1

Net income for the current year

80300

Workings:
Increase in Cash	90000
Increase in Accounts receivable (net)	65000
Increase in Inventory	163000
Decrease in Investments in FV-NI securities	-28000
Net increase in assets	290000
Decrease in Accounts payable	-71900
Increase in Unearned revenue	25000
Increase in Bonds payable	77400
Net increase in liabilities	30500
Increase in Common shares	128000
Increase in Contributed surplus	70900
Net increase in Equity	198900
Net increase in assets	290000
Less: Net increase in liabilities	30500
Less: Net increase in Equity	198900
Increase in Retained Earnings	60600
Increase in Retained Earnings	60600
Add: Dividends	19700
Net income for the current year	80300