Question 8 Presented below are changes in the account balances of Wenn Company during the year, except for retained earnings. Increase (Decrease) Increase (Decrease) Cash $28,860 Accounts payable $32,580 Accounts receivable (net) (17,010) Bonds payable (19,620) Inventory 52,010 Common stock 63,760 Plant assets (net) 46,730 Paid-in capital 15,390 The only entries in Retained Earnings were for net income and a dividend declaration of $17,520. (a) Compute the net income for the current year.

Question

Roman Wong

Business

9 November, 13:44

Question 8 Presented below are changes in the account balances of Wenn Company during the year, except for retained earnings. Increase (Decrease) Increase (Decrease) Cash $28,860 Accounts payable $32,580 Accounts receivable (net) (17,010) Bonds payable (19,620) Inventory 52,010 Common stock 63,760 Plant assets (net) 46,730 Paid-in capital 15,390 The only entries in Retained Earnings were for net income and a dividend declaration of $17,520. (a) Compute the net income for the current year.

+5

Answers (1)

Know the Answer?

Summer Stephens · Answer 1

Solution:

Change in assets = 28,860-17,010+52,010+46,730 = 110,590 (increase)

Change in liabilities = 32,580-19,620=12,960 (increase)

Change in stockholders equity = 110,590-12,960 = 97,630

Net increase = 97,630

Change in common stock = 63,760

Additional paid in capital = 15,390

Net increase accounted for = 63,760-15,390 = 48,370

Increase in retained earnings (net income) = 32560

Compute the net income for the current year.

Net income $32560