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Answer A, B, C at the bottom for Net Income (loss) Exercise 1-16 (Algo) Computing net income using accounting equation LO P2 Shep Company's records show the following information for the current year. Beginning of End of year year $54,800 $86,000 $24,400 $37,400 Total assets Total liabilities Determine net income (loss) for each of the following separate situations
Answer A, B, C at the bottom for Net Income (loss) Exercise 1-16 (Algo) Computing net income using accounting equation LO P2 Shep Company's records show the following information for the current year. Beginning of End of year year $54,800 $86,000 $24,400 $37,400 Total assets Total liabilities Determine net income (loss) for each of the following separate situations
a. Netincome= $0 , b. Net income = $56,000 , c. Net income = $88,000. LO P2Shep Company'srecords show the following information for the current year.Beginning of yearEnd of yearTotal assets$54,800$86,000Total liabilities$24,400$37,400Determine net income (loss) for each of the following separate situations:a. During the year, the owner made additionalinvestmentsof $50,000 in the business.b. During the year, dividends of $30,000 were declared and paid.c. During the year, a piece of land that cost $12,000 was sold for $14,000.Net income is theprofitor loss a company earns after all of its expenses have been accounted for. The accounting equation is a method of tracking a company's finances by looking at its assets, liabilities, and equity. The equation is:Assets = Liabilities + Equitya. When an owner makes an additional investment in a company, the accounting equation becomes:Assets = Liabilities + Equity + InvestmentTherefore, Shep Company's accounting equation at the end of the year is:Assets = $86,000Liabilities = $37,400Equity = $86,000 - $37,400 = $48,600Investment = $50,000Therefore, the net income is:Assets = Liabilities + Equity + Investment$86,000 = $37,400 + $48,600 + $50,000$86,000 = $86,000Since there was no income orexpenseduring the year, net income is zero.b. When dividends are paid out, the accounting equation becomes:Assets = Liabilities + Equity - DividendsTherefore, Shep Company's accounting equation at the end of the year is:Assets = $86,000Liabilities = $37,400Equity = $86,000 - $37,400 = $48,600Dividends = $30,000Therefore, the net income is:Assets = Liabilities + Equity -Dividends$86,000 = $37,400 + $48,600 - $30,000$86,000 = $56,000Therefore, the net income is $56,000.c. When a piece of land is sold, it is considered a gain or a loss. The accounting equation becomes:Assets = Liabilities + Equity + Gain/LossTherefore, Shep Company's accounting equation at the end of the year is:Assets = $86,000 + $14,000 = $100,000Liabilities = $37,400Equity = $48,600Gain/Loss = $14,000 - $12,000 = $2,000Therefore, the net income is:Assets = Liabilities + Equity + Gain/Loss$100,000 = $37,400 + $48,600 + $2,000$100,000 = $88,000Therefore, the net income is $88,000.Learn more aboutinvestments:brainly.com/question/21617407#SPJ11...