Owners Equity and Net Income
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At beginning of year, paid in capital was $82 and retained earningswas $49. During the year, the owners invested $34 and dividends of $5 were decalred and paid. Retained earnings at then end of the year were $52. How much was total owner's equity at the end of the year and how much was the net income for the year?
Here is all I can get to:
Paid in Capital
Beginning of year ............ $82
Owner invested ............ 34
Balance end of year $116
Retained Earnings
Beginning of year ............$ 49
Dividends ............. (5)
Balance end of year .......... 44 ----- this is not $52 What is wrong?
Net Income = Revenues - Expenses .......... I don't know how to get this from the above information.
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Solution Summary
The solution explains the calculation for net income and ending owners equity given the beginning balances.
Solution Preview
Retained Earnings increase due to the net income of the year and reduce due to dividends. If you make a statement of retained ...
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