The following information appeared in the financial records of the Cracker Corporation at year-end: Accounts receivable $ 23,000 Accounts...

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Accounting

The following information appeared in the financial records ofthe Cracker Corporation at year-end:
Accounts receivable $ 23,000
Accounts payable 11,000
Supplies 9,000
Cash 8,000
Equipment 138,000
Capital stock 130,000
If the beginning of year balance in retained earnings is $30,000and $12,000 in dividends are paid during the year, net income forthe year was:
$18,000
$57,000
$19,000
$39,000

Accounts receivable	$ 23,000
Accounts payable	11,000
Supplies	9,000
Cash	8,000
Equipment	138,000
Capital stock	130,000

Answer & Explanation Solved by verified expert

3.6 Ratings (583 Votes)

	CALCULATION OF TOAL ASSETS AND TOTAL LIABILITIES + CAPITAL STOCK


	Assets	AMOUNT
	Cash	$ 8,000
	Account Receivable	$ 23,000
	Supplies	$ 9,000

	Equipment	$ 1,38,000

	Total Assets	$ 1,78,000

	Total Liabilities
	Account Payable	$ 11,000
	Capital Stock	$ 1,30,000

	Total of Liability and Capital Stock	$ 1,41,000


	CALCULATION OF THE CLOSING RETAINED EARNINGS
	Closing Retained Earning = Total Assets -Total Liabilities and Capital Stock
	Closing Retained Earning = $ 178,000 - $ 141,000 =	$ 37,000


	Net Income = Clsoing Retained Earning + Dividend Paid - Opening Retained Earning
	Net Income = ( $ 37,000 + $ 12,000 ) - $ $ 30,000
	Net Income = $ 49,000 - $ $ 30,000
	Net Income = $ 19,000

	Answer = Option 3 = $ 19,000

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Transcribed Image Text

The following information appeared in the financial records ofthe Cracker Corporation at year-end:Accounts receivable$ 23,000Accounts payable11,000Supplies9,000Cash8,000Equipment138,000Capital stock130,000If the beginning of year balance in retained earnings is $30,000and $12,000 in dividends are paid during the year, net income forthe year was:$18,000$57,000$19,000$39,000