EXERCISE 1-5
| Purpose: | (L.O. 6, 7, 8) This exercise reviews the basic accounting equation (A = L + SE) and the connection between the income statement and the balance sheet. The connection is a change in stockholders' equity during a period due to the net income or net loss for the period. |
The following data were extracted from the records of Handy Hernanco Corporation:
| Total assets, beginning of the period | $250,000 |
| Total liabilities, beginning of the period | 90,000 |
| Dividends declared and paid during the period | 75,000 |
| Total assets, end of the period | 270,000 |
| Total liabilities, end of the period | 95,000 |
| Sale of additional stock during the period | 25,000 |
Instructions
Compute the amount of net income (or net loss) for the period. Show your computations.
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