Using the accounting equationDuring 2018, Flowing Rivers Spa reported revenue of $30,000. Total expenses for the year were $15,000. Rowing Rivers Spa ended the year with total assets of $43,000, and it owed debts totaling $14,000. At year-end 2017, the business reported total assets of $28,000 and total liabilities of $14,000.RequirementsCompute Flowing Rivers Spa’s net income for 2018.Did Flowing Rivers Spa’s stockholders’ equity increase or decrease during 2018? By how much?

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Asked Dec 14, 2019
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Using the accounting equation

During 2018, Flowing Rivers Spa reported revenue of $30,000. Total expenses for the year were $15,000. Rowing Rivers Spa ended the year with total assets of $43,000, and it owed debts totaling $14,000. At year-end 2017, the business reported total assets of $28,000 and total liabilities of $14,000.

Requirements

  • Compute Flowing Rivers Spa’s net income for 2018.
  • Did Flowing Rivers Spa’s stockholders’ equity increase or decrease during 2018? By how much?
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Expert Answer

Step 1

Compute net income for...

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Net income Revenue- Expenses $30,000-$15,000 $15,000

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