For 2009 your equity is: Assets minus liabilities. So $400,000 - 250,000 = $150,000 and your owners investment was $100,000 which means that $150,000 Owners Equity contains $100,000 investment, so the other $50,000 is net income for year 2009.
Just use the ending 2009 numbers for assets, liabilities, owners equity and your ending 2010 numbers with any additional information to solve for your missing amounts for year 2010. For 2011 you will use ending 2010 numbers and ending 2011 numbers with any additional information provided to solve for the missing 2011 amounts.
Lily Company had the following assets and liabilities on the dates indicated.
December 31
Total Assets
Total Liabilities
2009 $400,000 $250,000
2010 $460,000 $300,000
2011 $590,000 $400,000
Lily began business on January 1, 2009, with an investment of $100,000.
Instructions
From an analysis of the change in owner's equity during the year, compute the net income (or loss) for the following situations. (If a net loss, record amount using either a negative sign preceding the number eg -45 or parentheses eg (45).)
(a) 2009, assuming Lily's drawings were $15,000 for the year.
$
(b) 2010, assuming Lily made an additional investment of 50,000 and had no drawings in 2010.
$
(c) 2011, assuming Lily made an additional investment of $15,000 and had drawings of $30,000 in 2011.
$
1 answer
1 answer