180. Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: Assets Liabilities Beginning of the year $114,000 $68,000 End of the year 135,000 73,000 If the owners made no investments and dividends of $5,000 were paid during the year, what was the amount of net income earned by Josephine's Bakery during the current year? Answer: Beginning owner's equity = $114,000 - $68,000 = $46,000 Ending owner's equity = $135,000 - $73,000 = $62,000 Increase in owner's equity = $62,000 - $46,000 = $16,000 Net income = $16,000 + $5,000 = $21,000 Blooms Taxonomy: Analyze AACSB: Analytic AACSB: Communication AICPA BB: Critical Thinking AICPA BB: Industry AICPA FN: Decision Making AICPA FN: Measurement AICPA FN: Reporting Difficulty: 3 Hard Learning Objective: 02-A1 Topic: Accounting Equation Topic: Net Income Topic: Dividends [Question] 181. Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: Assets Liabilities Beginning of the year $114,000 $68,000 End of the year 135,000 73,000
180. Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: Assets Liabilities Beginning of the year $114,000 $68,000 End of the year 135,000 73,000 If the owners made no investments and dividends of $5,000 were paid during the year, what was the amount of net income earned by Josephine's Bakery during the current year? Answer: Beginning owner's equity = $114,000 - $68,000 = $46,000 Ending owner's equity = $135,000 - $73,000 = $62,000 Increase in owner's equity = $62,000 - $46,000 = $16,000 Net income = $16,000 + $5,000 = $21,000 Blooms Taxonomy: Analyze AACSB: Analytic AACSB: Communication AICPA BB: Critical Thinking AICPA BB: Industry AICPA FN: Decision Making AICPA FN: Measurement AICPA FN: Reporting Difficulty: 3 Hard Learning Objective: 02-A1 Topic: Accounting Equation Topic: Net Income Topic: Dividends [Question] 181. Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: Assets Liabilities Beginning of the year $114,000 $68,000 End of the year 135,000 73,000