Question

E1-23 (similar to) Question During 2018, wo Touch Sparepondrevenus of $40.000 Total poses for the year were 27.000 Sweet Touch Spanded the year with Wag 9.000. Ayond 2017, the business reported two of $18.000 and abilities of 50.000 all of $1,000 and towed Hamme o Requirement to Begin by identifying the ls income for 2018 cod e 7 8 9 WERTYU 0 Pill Command option command

Answer 1

1. Calculation of Net income of 2018

Net income = Revenue - Expenses

=40,000-27,000

=13,000

2. Since there is a net income of 13,000 during 2018, the stock holders equity also will be increased by the same amount of 13,000.

So closing balance of Equity = Total asset - Debt =31,000-9000=22,000 which is more than 13,000 of opening balance (18,000-9000=9000)