Ch1Notes - Chapter 1 Accounting Homework Notes Net Income...

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Chapter 1 Accounting Homework Notes Net Income is Revenues (-) Expenses - Net Loss is if expenses exceed revenues Stockholders’ equity Assets (-) liabilities Statement of stockholders’ equity Common stock (+) retained earnings -EXAMPLE: At the beginning of the year (January 1), Bennett Drilling has $8,100 of common stock outstanding and retained earnings of $7,300. During the year, Bennett reports net income of $7,800 and pays dividends of $2,070. In addition, Bennett issues additional common stock for $6,700. Bennett Drilling Statement of Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Balance at January 1 $ 8,100 $ 7,300 $ 15,400 Issuance of common stock 6,700 0 6,700 Net income for the year 0 7,800
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7,800 Less: Dividends 0 -2,070 -2,070 Balance at December 31 $ 14,800 $ 13,030 $ 27,830 Balance She et - Retained e arnings Assets (-)liabilities = net incom e; net incom e (-) com mon stock =R et ained e arnings -EXAMPLE: Accounts Amounts Cash received from sale of products to customers $ 30,400 Cash received from the bank for long-term loan 36,700 Cash paid to purchase factory equipment (41,600) Cash paid to merchandise suppliers (11,150) Cash received from the sale of an unused warehouse 10,550 Cash paid to workers (23,650) Cash paid for advertisement (3,300) Cash received for sale of services to customers
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Ch1Notes - Chapter 1 Accounting Homework Notes Net Income...

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