Winder Corporation had total shareholders' equity of $665,000 at the beginning of the year and $773,000 at the end of the year. Shareholders invested an additional $75,000 during the year. Also during the year, cash dividends of $20,000 were declared and paid. Calculate the net income or loss for the year.

Question

Quizplus · Accepted Answer

Net income can be calculated using the change in shareholders' equity: Ending equity ($773,000) - Beginning equity ($665,000) = $108,000. Then subtract the additional investment ($75,000) and add back the dividends paid ($20,000) to find the net income: $108,000 - $75,000 + $20,000 = $53,000.

Winder Corporation Had Total Shareholders' Equity of $665,000 at the Beginning