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liq [111]
3 years ago
12

Bravo Company began operations at the beginning of 20X6 with a $10,000 cash investment by stockholders. During 20X6, Bravo Compa

ny had revenue on account of $5,000; of this amount $2,000 was collected during 20X6 and $3,000 was an outstanding r incurred $3,000 of operating expenses during 20X6; of this amount $1,000 was unpaid at year end. During 20X6, $1,000 cash was disbursed as dividends. The only other transaction during 20X6 was the purchase of $5,000 of equipment for cash near the end of the year. How much was Bravo Company's 20x6 net income? le at year-end. Bravo Company 1b Beginning stockholders' equity was $120,000. Ending stockholders' equity was $195,000. Additional issuances of capital stock during the year amounted to he yeur amounied io $12000 How amuch income ar he year?
Business
1 answer:
aniked [119]3 years ago
3 0

Answer:

There are two unrelated sub-question in this question.

First question from start to the question: "How much was Bravo Company's 20x6 net income? le at year-end": The answer is $2,000.

Second question start from the end of the first question to the end. The question is: How much income for the year?": The answer is: $63,000.

Explanation:

* First question: Assume Bravo Company applies accrual accounting, we have: Bravo Company's 20x6 net income = Revenue for 20x6 - Expenses for 20x6 ( ignore cash flow because accrual accounting recorded revenues/expenses when they are earned/incurred rather than cash is collected/paid) = 5,000 - 3,000 = $2,000.

* Second question: We have income for the year = Ending Balance of equity - Beginning balance of equity - Additional issuance of equity ( as there is no information on dividend distribution or opening balance of retained earnings) = 195,000 - 120,000 - 12,000 = $63,000.  

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Pete Jackson purchased office equipment costing $3,000 for his business and paid immediately. record this transaction in the accounting equation by: decrease cash, increase equipment.

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FIFO (First-In-First-Out) is a method of inventory valuation where the stock that is purchased first is used first. In other words, the oldest stock is used first. This is common for perishable items which if not used up fast, will be wasted.

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