Answer:
a. $82,500
b. $103,000
c. $88,000
Explanation:
We know that
Total assets = Total liabilities + stockholder equity
And the assets and liabilities of May and June are given
So For May
The stockholder equity would be
= $188,000 - $122,000
= $66,000
And for June
The stockholder equity would be
= $244,000 - $88,000
= $156,000
So net increase would be
= $156,000 - $66,000
= $90,000
a. The stock is issued for $7,500
So, the net income would be
= $90,000 - $7,500
= $82,500
b. The cash dividend is paid for $13,000
So, the net income would be
= $90,000 + $13,000
= $103,000
c. Common stock is issued for $20,000 and cash dividend is paid for $18,000
So, the net income would be
= $90,000 - $20,000 + $18,000
= $88,000
