1. The December 31, 2012, balance sheet for Classic Company showed total stockholders' equity
of $67,000. Total stockholders' equity increased by $32,000 between December 31, 2012, and
December 31, 2013. During 2013 Classic Company acquired $11,500 cash from the issue of
common stock. Classic Company paid an $9,000 cash dividend to the stockholders during 2013.
Determine the amount of net income or loss Classic reported on its 2013 income statement.
(Input the amount as positive value. Omit the "$" sign in your response.)
The December 31, 2012, balance sheet for Classic Company showed total stockholders' equity
of $67,000. Total stockholders' equity increased by $32,000 between December 31, 2012, and
December 31, 2013. During 2013 Classic Company acquired $11,500 cash from the issue of
common stock. Classic Company paid an $9,000 cash dividend to the stockholders during 2013.
Solution
here in the given question , it is said that Equity increased $32000 i.e., $11500 is obtained
through issue of equity shares.
that means the balance is trough earnings i.e., $32000-$11500 = $20500 and Dividend paid =
$9000/-
There fore Total Profit reported in 2013 = $29500 ($20500+$9000)