Slow, Inc., reported the following asset and liability balances at the ends of 20X1 and 20X2: $$\begin{array} { | l | r | r | }
\hline & \underline { \mathbf { 2 0 X1 } } & \underline { \mathbf { 2 0 X 2 } } \
\hline \text { Total Assets } & \$ 80,000 & \$ 110,000 \
\hline \text { Total Liabilities } & 50,000 & 40,000 \
\hline \text { Cash } & 22,000 & 32,000 \
\hline
\end{array}$$ During 20X2, cash dividends of $5,000 were declared and paid. Additional shares were issued for $15,000. What was the profit (or loss) for 20X2?

Question

Slow, Inc., reported the following asset and liability balances at the ends of 20X1 and 20X2: $$\begin{array} { | l | r | r | } 
\hline & \underline { \mathbf { 2 0 X1 } } & \underline { \mathbf { 2 0 X 2 } } \
\hline \text { Total Assets } & \$ 80,000 & \$ 110,000 \
\hline \text { Total Liabilities } & 50,000 & 40,000 \
\hline \text { Cash } & 22,000 & 32,000 \
\hline
\end{array}$$ During 20X2, cash dividends of $5,000 were declared and paid. Additional shares were issued for $15,000. What was the profit (or loss) for 20X2?

Quizplus · Accepted Answer

The profit (or loss) for 20X2 can be calculated using the following formula:Profit (or loss) = (Total Assets at the end of the year - Total Assets at the beginning of the year) - (Total Liabilities at the end of the year - Total Liabilities at the beginning of the year) + (Cash dividends declared and paid) - (Additional shares issued)Substituting the given values into the formula, we get:Profit (or loss) = ($110,000 - $80,000) - ($40,000 - $50,000) + ($5,000) - ($15,000)= $30,000 - (-$10,000) + $5,000 - $15,000= $30,000Therefore, the profit for 20X2 was $30,000.

Slow, Inc, Reported the Following Asset and Liability Balances at the the Ends