At the beginning of the current fiscal year, the balance sheet for Dav

QUESTION

At the beginning of the current fiscal year, the balance sheet for Davis Co. showed liabilities of $320,000. During the year liabilities decreased by $18,000, assets increased by $65,000, and paid in capital increased from $30,000 to $192,000. Dividends declared and paid during the year were $25,000. At the end of the year, owners equity totaled $429,000.Required:Calculate net income (or loss) for the year.
Here we will find the missing value by using various accounting equations and accounting principles: Increase in net assets = 65000+18000 = 83000 Increase in paid in capital = 192000 30000 =

162000 Net income = Increase in net assets increase in paid in capital + dividend paid = 83000 162000 + 25000 = -54000 (Loss)

ANSWER:

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