Reference no: EM132679305
Problem - Net income and Stockholders' Equity for four businesses
Four different corporations, Aries, Gemini, Leo, and Pisces, show the same balance sheet data at the beginning and end of a year. These data, exclusive of the amount of stockholders' equity, are summarized as follows:
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Total Assets
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Total Liabilities
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Beginning of the year
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$400,000
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$100,000
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End of the year
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750,000
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300,000
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On the basis of the above data and the following additional information for the year, determine the net income (or loss) of each company for the year. (Hint: First determine the amount of increase or decrease in stockholders' equity during the year.)
Aries: No additional capital stock was issued and no dividends were paid.
Gemini: No additional capital stock was issued, but dividends of $40,000 were paid.
Leo: Additional capital stock of $90,000 was issued, but no dividends were paid.
Pisces: Additional capital stock of $90,000 was issued and dividends of $40,000 were paid.
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