Using the accounting equation to analyze business transactions [5-10 min]
Great City Builders, Inc., balance sheet data at May 31, 2012, and June 30, 2012, follow:
| May 31, 2012 | June 30, 2012 |
Total assets | $177,000 | $213,000 |
Total liabilities | 122,000 | 144,000 |
Requirement
1. Following are three situations about stockholders’ investments and dividends of the business during June. For each situation, compute the amount of net income or net loss during June 2012.
a. The company issued $6,000 of common stock and paid no dividends.
b. The company issued no common stock. It paid dividends of $10,000.
c. The company issued $18,000 of common stock and paid dividends of $20,000.
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