Calculation of Net Income from the Change in Shareholders' Equity

question 33

Essay

Calculation of net income from the change in shareholders' equity
Presented below are changes in all account balances of Heys Inc. during last year, except for retained earnings.
The only entries in retained earnings were for net income and a dividend declaration of $12,000.
Instructions
Calculate the net income for last year.

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Definitions:

Overhead Costs

Indirect costs of running a business that are not directly tied to production, such as rent, utilities, and salaries.

Departmental Overhead Rate

An allocation rate used to assign overhead costs to specific departments based on relevant criteria, such as labor hours or machine hours.

Machine Hours

Machine hours refer to the total operating time of a machine or group of machines during a specific period, used as a basis for allocating costs in manufacturing.

Departmental Overhead Rates

Costs associated with a department's operations that are distributed across products or services, often based on a predetermined rate.