Presented below is selected information pertaining to Pineap

Presented below is selected information pertaining to Pineapple Enterprises Ltd. for last year:

Assets January 1                                            

$240,000

Assets December 31                                       

$320,000

Liabilities January 1                                         

$120, 000

Common shares December 31   

60,000

Retained earnings December 31                     

$20,000

Common shares issued during the year            

2,000

Dividends declared during the year                 

32,000

Required

Calculate the net income for last year.

Assets January 1	$240,000
Assets December 31	$320,000
Liabilities January 1	$120, 000
Common shares December 31	60,000
Retained earnings December 31	$20,000
Common shares issued during the year	2,000
Dividends declared during the year	32,000

Solution

Assets January 1 240000 Less Liabilities January 1 120000 Common stockholders equity January 1 120000 less Common stock January 1 ( 60000-2000) 58000 Retained earnings January 1 62000 Retained earnings December 31 20000 Add Dividend declared 32000 52000 less Retained earnings January 1 62000 Net income -10000