On January 1, 2014, Affleck Company reported equity of $470,000. During the year, the company paid dividends of $20,000. At December 31, 2014, the amount of equity was $520,000. What amount of net income or net loss would the company report for 2014?

Question

Quizplus · Accepted Answer

The change in equity from $470,000 to $520,000 is $50,000. Since dividends of $20,000 were paid, the net income must have been $70,000 to result in the $50,000 increase in equity.

On January 1, 2014, Affleck Company Reported Equity of $470,000