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24 October, 17:42

Eagle Corp. operates Magnetic Resonance Imaging (MRI) clinics throughout the Northeast. At theend of the current period, the company reports the following amounts: Assets = $50,000; Liabilities = $27,000; Dividends = $3,000; Revenues = $14,000; Expenses = $9,000. Required:1. Calculate net income. 2. Calculate stockholders' equity at the end of the period.

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  1. 24 October, 17:48
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    Net Income = $5,000

    Stakeholder's Equity = $23,000

    Explanation:

    Net Income

    Revenue $14,000

    -Expenses $9,000

    =Net income $5,000

    Assets = $50,000

    Liabilities = $27,000

    Accounting Equation:

    Assets = Stockholder's equity + Liabilities

    $50,000 = Stockholder's equity + $27,000

    Stockholder's equity = $50,000 - $27,000

    Stockholder's equity = $23,000

    Net income of Eagle Corp. is $5,000 and Stockholder's equity is $23,000.
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