The accounts of Odie Company with the increases or decreases that occurred during the past year are as follows:
Except for net income,an investment of $3,000 by stockholders,and a cash dividend of $11,000 to stockholders,no other items affected stockholders' equity.Using the balance sheet equation,compute net income for the past year.

Question

The accounts of Odie Company with the increases or decreases that occurred during the past year are as follows:

Except for net income,an investment of $3,000 by stockholders,and a cash dividend of $11,000 to stockholders,no other items affected stockholders' equity.Using the balance sheet equation,compute net income for the past year.

Paola Rodriguez · Accepted Answer

Final Answer : $23,000Assets = Liabilities + Stockholders' EquityAssets Increased by $20,000; Liabilities Increased by $5,000; Therefore,Equity needs to Increase by $15,000.Change in Equity = Contributed Capital + Net Income - DividendsIncrease of $15,000 = $3,000 + Net Income - $11,000$15,000 = Net Income - $8,000Net Income = $23,000

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