Asked Feb 3, 2019

How would I calculate net income if given the accounts of Cash, AR, Inventory, Investments, AP, Bonds Payable, and PIC in Excess of Par-Common Stock?


Expert Answer

1 Rating

We know that the total of assets is equal to the total of liabilities.

 We can use this information to calculate different things.


Total shareholder fund + Total Liabilities = Total Assets


This implies:

Total shareholder fund = Total Assets – Total Liabilities


If we can calculate the total of assets and the total of liabilities, we can easily get the total shareholder fund.


Once we have the total shareholder fund. We can use the following information to extract the amount of net income. The Total equity consists of:


Total shareholder fund = Common Stock + additional paid in capital + preference stock + retain...


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