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Toth Company had the following assets and liabilities on the dates indicated.
Exercise 1-10 xYour answer is incorrect. Try again. Toth Company had the following assets and liabilities on the dates indicated December 31 2014 2015 2016 Total Assets Total Liabilities $496,548 $576,548 串706,548 $199,562 $249,562 $349,562 Toth began business on January 1, 2014, with an investment of $99,702 from stockholders From an analysis of the change in stockholders’ equity during the year, compute the net income (or loss) for: (a) 2014, assuming Toth paid $24,768 in dividends for the year. Net income (loss) for 2014 (b) 2015, assuming stockholders made an additional investment of $43,574 and Toth paid no dividends in 2015 Net income (loss) for 201!5 (c) 2016, assuming stockholders made an additional investment of $17,752 and Toth paid dividends of $29,847 in 2016. Net income (loss) for 2016
Expert Answer
Total Assets = Total Liabilities + Equity
Hence, Equity = Total Assets – Total Liabilities
Now,
a.
| Equity as on December 31 ,2014 = Total Assets as on December 31 ,2014 – Total Liabilties as on December 31 ,2014 | 296,986.00 |
| Less : Opening Equity (Given) | 99,702.00 |
| Change in Equity as on December 31 ,2014 | 197,284.00 |
| Add: Dividend Paid | 24,768.00 |
| Net Income (Loss) | 222,052.00 |
b.
| Equity as on December 31 ,2015 = Total Assets as on December 31 ,2015- Total Liabilties as on December 31 ,2015 | 326,986.00 |
| Less : Opening Equity as calculated above | 296,986.00 |
| Change in Equity as on December 31 ,2014 | 30,000.00 |
| Less : Additional Investment | 43,574.00 |
| Net Income (Loss) | -13,574.00 |
c.
| Equity as on December 31 ,2015 = Total Assets as on December 31 ,2015- Total Liabilties as on December 31 ,2015 | 356,986.00 |
| Less : Opening Equity as calculated above | 326,986.00 |
| Change in Equity as on December 31 ,2014 | 30,000.00 |
| Less : Additional Investment | 17,752.00 |
| Add: Dividends | 29,847.00 |
| Net Income (Loss) | 42,095.00 |
