Business
Engineering
Math
Science
Social Science
Accounting (Text Only)
Solutions
Accounting (Text Only)
Net income and owner's equity for four businesses
Four different proprietorships, Jupiter, Mars, Saturn, and Venus, show the same balance sheet data at the beginning and end of a year. These data, exclusive of the amount of owner's equity, are summarized as follows:
| Total Assets | Total Liabilities | |
| Beginning of the year | $550,000 | $215,000 |
| End of the year | 844,000 | 320,000 |
On the basis of the preceding data and the following additional information for the year, determine the net income (or loss) of each company for the year. (Hint: First, determine the amount of increase or decrease in owner's equity during the year.)
Jupiter: The owner had made no additional investments in the business and had made no withdrawals from the business.
Mars: The owner had made no additional investments in the business but had withdrawn $36,000.
Saturn: The owner had made an additional investment of $60,000 but had made no withdrawals.
Venus: The owner had made an additional investment of $60,000 and had withdrawn $36,000.
Net income: The net income refers to the excess of revenues over expenses, in a business after making all the adjustments. The net income can be expressed as follows:
Owner’s equity: Owner’s equity refers to the right the owner posses over the resources of the business. Revenues and the expenses are the components of the owner’s equity.
To determine: the net income for the given companies.
The net income for the Company J:
| Asset | Â = | Liabilities | + | Owner's Equity | |
| End of the year | $844,000 | Â = | $320,000 | Â + | $524,000 |
| Beginning of the year | $550,000 | Â = | $215,000 | Â + | $335,000 |
| $294,000 | = | $105,000 | + | $189,000 | |
| Net Income | ( increase in owner's equity) | $189,000 | |||
Table (1)
The difference between the owner's equity in the beginning and the end of the year is considered as the net income.
The net income for the Company M:
| Asset | Â = | Liabilities | + | Owner's Equity | |
| End of the year | $844,000 | Â = | $320,000 | Â + | $524,000 |
| Beginning of the year | $550,000 | Â = | $215,000 | Â + | $335,000 |
| $294,000 | = | $105,000 | + | $189,000 | |
| Increase in owner's equity | $189,000 | ||||
| Withdrawals | (+) $36,000 | ||||
| Net Income | $225,000 | ||||
Table (2)
The sum of the increase in owner's equity and the withdrawals is considered as the net income...
Chapter 1 Solutions
Additional Business Solutions
Find more solutions based on key concepts
Show solutions addDepletion Rate Oxford Quarries purchased 45 acres of land for $185,000. The land contained stone that Oxford wi...
Cornerstones of Financial Accounting
What goals for the OE/S process (both operations process and information process goals) would be more difficult...
Accounting Information Systems
Internal control of cash receipts The procedures used for over-the-counter receipts are as follows. At the clos...
Financial & Managerial Accounting
Closing entries using periodic inventory system United Rug Company is a small rug retailer owned and operated b...
Corporate Financial Accounting
The Bureau of Transportation Statistics Omnibus Household Survey is conducted annually and serves as an informa...
STATISTICS F/BUSINESS+ECONOMICS-TEXT
(Corporations) How did the institution of the firm get a boost from the advent of the Industrial Revolution? Wh...
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
Suppose that a borrower and a lender agree on the nominal interest rate to be paid on a loan. Then inflation tu...
Principles of Macroeconomics (MindTap Course List)
What is trade associations role in encouraging ethics?
Foundations of Business (MindTap Course List)
BALANCE SHEET Which of the following actions are most likely to directly increase cash as shown on a firms bala...
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
The article Can We Really Walk Straight? (Amer. J. of Physical Anthropology, 1992: 19-27) reported on an experi...
Probability and Statistics for Engineering and the Sciences
STATEMENT OF CASH FLOWS You have just been hired as a financial analyst for Barrington Industries. Unfortunatel...
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
You were planning to spend Saturday working at your part-time job, but a friend asks you to go skiing. What is ...
Principles of Economics (MindTap Course List)
Request Refusal: Turning Down an Award-Winning Charity. As a vice president of a financial services company, yo...
Essentials of Business Communication (MindTap Course List)
An economy is operating with output that is 400 billion below its natural level, and fiscal policymakers want t...
Brief Principles of Macroeconomics (MindTap Course List)
CORPORATE VALUATION Dantzler Corporation is a fast-growing supplier of office products. Analysts project the fo...
Fundamentals of Financial Management (MindTap Course List)
Give three examples of important trade-offs that you face in your life.
Principles of Microeconomics (MindTap Course List)
Why is a product-oriented layout preferred by lean manufacturers over a process-oriented layout?
Financial And Managerial Accounting
Milbank Repairs Service, an electronics repair store, prepared the following unadjusted trial balance at the e...
Financial Accounting
ADJUSTMENTS AND WORK SHEET SHOWING NET INCOME Louie Long started a business called Louies Lawn Service. The tri...
College Accounting, Chapters 1-27
One company had 40 percent of its workers and 20 percent of its managers resign during the first year after it ...
Management, Loose-Leaf Version
Draw an example of a production possibilities frontier for Robinson Crusoe, a shipwrecked sailor who spends his...
Essentials of Economics (MindTap Course List)
How are deferred tax liabilities and assets reported on a corporations balance Sheet?
Intermediate Accounting: Reporting And Analysis
PAYROLL CONTROLS Refer to the flowchart for Problem 2. Required a. What risks are associated with the payroll p...
Accounting Information Systems
Lisa Meilo works for Pacific Company, which pays its employees time-and-a-half for all hours worked in excess o...
College Accounting (Book Only): A Career Approach
Use the following information for Exercises 3-37 and 3-38: Alisha Incorporated manufactures medical stents for ...
Managerial Accounting: The Cornerstone of Business Decision-Making
Summarize how marketing creates value through the four types of utility.
Contemporary Marketing
Explain cause-related marketing
MKTG 12:STUDENT ED.-TEXT
Accounts receivable analysis The following data are taken from the financial statements of Krawcheck Inc. Terms...
Financial & Managerial Accounting
Selected transactions for Capers Company during October of the current year are listed in Problem 6-1A. Instruc...
Financial Accounting
Corporations do more dollar volume of business than sole proprietorships and partnerships combined.
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
Roberta Felino, owner of Robertas Beauty Salon, makes bank deposits in the night depository at the close of eac...
College Accounting (Book Only): A Career Approach
Evaluate the following statement: A higher price level decreases the purchasing power of the dollar and reduces...
Exploring Economics
The Bureau of Transportation Statistics Omnibus Household Survey is conducted annually and serves as an informa...
Statistics for Business & Economics, Revised (MindTap Course List)
Suppose that in a year an American worker can produce 100 shirts or 20 computers and a Chinese worker can produ...
Principles of Macroeconomics (MindTap Course List)
What are the steps in the IPP, and what happens at each step?
Pkg Acc Infor Systems MS VISIO CD
CALCULATING THE WACC Here is the condensed 2014 balance sheet for Skye Computer Company (in thousands of dollar...
Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
MULTIPLE IRRS AND MIRR A mining company is deciding whether to open a strip mine, which costs 2 million. Cash i...
Fundamentals of Financial Management (MindTap Course List)
Refer to Problem 2-18B. Assume that Nelson had agreed with her employer prior to the performance of the work th...
PAYROLL ACCT.,2019 ED.(LL)-TEXT
Flow of costs and income statement R-Tunes Inc. is in the business of developing, promoting, and selling musica...
Survey of Accounting (Accounting I)
Stockholders Equity section of balance sheet List the errors in the following Stockholders Equity section of th...
Corporate Financial Accounting
Can you provide some examples of power spenders of indirect spending and services? How can training help to dep...
Purchasing and Supply Chain Management
Janice decides to go out on a date with Kyle instead of Robert. Do you think Janice is using some kind of ratio...
Microeconomics
The TightBond company produces three types of glue on two different production lines. Each line can be used by ...
Practical Management Science
Why might per-capita real economic growth be a more useful measurement than absolute real economic growth?
Economics (MindTap Course List)
If the long-run Phillips curve is vertical, then any government policy designed to lower a. unemployment will n...
Economics For Today
Identify and explain three methods for achieving strategic alignment.
Cornerstones of Cost Management (Cornerstones Series)
