Question

Eagle Corp. operates Magnetic Resonance Imaging (MRI) clinics throughout the Northeast. At theend of the current period, the company reports the following amounts: Assets = $50,000; Liabilities= $27,000; Dividends = $3,000; Revenues = $14,000; Expenses = $9,000.Required:1.Calculate net income.2.Calculate stockholders' equity at the end of the period.

Answer 1

Answer:

Net Income = $5,000

Stakeholder's Equity = $23,000

Explanation:

Net Income

Revenue        $14,000

-Expenses       $9,000

=Net income   $5,000

Assets = $50,000

Liabilities = $27,000

Accounting Equation:

Assets = Stockholder's equity + Liabilities

$50,000 = Stockholder's equity + $27,000

Stockholder's equity = $50,000 - $27,000

Stockholder's equity = $23,000

Net income of Eagle Corp. is $5,000 and Stockholder's equity is $23,000.