At the beginning of the year, the Stephen Company had total assets of $1,800,000 and total stockholders' equity of $690,000. During the year, total assets increased by $270,000, and total liabilities increased by $126,000. The company also paid $21,000 in dividends.
How much was the net income for the year?

Question

Quizplus · Accepted Answer

Assets - Stockholder's equity = Liabilities
($1,800,000 - $690,000 = $1,110,000)
Year-end Assets - Year-end Liabilities = year-end Stockholders' equity
[($1,800,000 + $270,000) - ($1,110,000 + $126,000) = X = $834,000]
Net income = Ending Stockholders' equity + Dividends - Beginning Stockholders' equity
(X = $834,000 + $21,000 - $690,000)
(X= $165,000)

At the Beginning of the Year, the Stephen Company Had