Net income and stockholders’ equity for four businesses
Four different corporations, Amber, Blue, Coral, and Daffodil, show the same balance sheet data at the beginning and end of a year. These data, exclusive of the amount of stockholders’ equity, are summarized as follows:
Total Assets | Total Liabilities | |
Beginning of the year | $1,220,000 |
$ 990,000 |
End of the year | 1,730,000 | 1,150,000 |
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 stockholders’ equity during the year.)
Amber. No additional common stock was issued and no dividends were paid.
Blue: No additional common stock was issued, but dividends of $60,000 were paid.
Coral: Additional common stock of $140,000 was issued, but no dividends were paid.
Daffodil: Additional common stock of $140,000 was issued and dividends of $60,000 were paid
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