Use the following information to calculate for the year ended December 31, 2007 (a) net income (net loss), (b)

Question

Supplies $ 500 Revenues $16,000

Operating expenses 10,000 Cash 15,000

Accounts payable 11,000 Dividends 6,000

Accounts receivable 4,000 Notes payable 1,000

Common stock 10,000 Equipment 7,500

Retained earnings (beginning) 5,000

Answer 1

(a) Net Income = 6,000.  (Revenues - Expenses)

(b) Ending RE= 5,000 (RE Beg Bal + Net Income - Div)

(c) Total Assets = 27,000 (Cash + Supplies + AR + Equip)