The Lim Company Had the Following Assets and Liabilities on the Dates

question 222

Essay

The Lim Company had the following assets and liabilities on the dates indicated. Lim began business on January 1, 2012, with an investment of $100,000.
Instructions
From an analysis of the change in equity during the year, compute the net income (or
loss) for:
(a) 2012, assuming Lim paid dividends of $25,000 for the year.
(b) 2013, assuming Lim made an additional investment of $60,000 and paid no dividends in 2013.
(c) 2014, assuming Lim made an additional investment of $10,000 and paid dividends of $30,000 in 2014.

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Definitions:

Consumer Surplus

The difference in the amount consumers are prepared to pay versus what they actually pay for goods or services.

Trucks

Large motor vehicles designed for transporting goods by road.

Government Revenue

Income received by the government from taxes and other sources used to fund public services and projects.

Tariff

A tax imposed by a government on goods and services imported from other countries, used to control trade and protect domestic industries.