Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 108

Review exercise—calculate net income At the beginning of the current fiscal year, the balance sheet of Cummings Co. showed liabilities of $219,000. During the year, liabilities decreased by $36,000; assets increased by $77,000; and paid-in capital also increased by $10,000 to $190,000. Dividends declared and paid during the year were $62,000. At the end of the year, owners’ equity totaled $379,000.

Required:

Calculate net income or loss for the year using the same format as shown in Exercise 8.1.

Step 1 of 4

Calculate Net income

Accounting equation: It is the equation that is the basis of double entry of accounting system. The accounting equation is as follows: