Answer:
amount of net income during 2006 is $65000
Step-by-step explanation:
Given data
assets in 2005 = $925,000
liabilities in 2005 = $285,000
invested an additional $50,000
withdrew $30,000
assets in 2006= $980,000
and liabilities in 2006 = $225,000?
to find out
amount of net income during 2006
solution
in 2005
assets = $925,000
liabilities = $285,000
so stock holder equity = $640000
and in 2006
assets = $980,000
and liabilities = $225,000
so stock holder equity = $725000
so retaining earning for both year is $725000 - $640000 i.e $85000
so net income = retaining earning + withdrew - investment
net income = $85000 + $30,000 - $50,000
net income = $65000
amount of net income during 2006 is $65000
