Josephine's Bakery Had the Following Assets and Liabilities at the Beginning

question 138

Essay

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year:
$\begin{array}{|l|r|r|} \hline& \text { Assets } & \text { Liabilities } \\\hline \text { Beginning of the year } & \$ 114,000 & \$ 68,000 \\\hline \text { End of the year } & 135,000 & 73,000\\\hline\end{array}$
If the owners invested an additional $12,000 in the business during the year,but no dividends were paid,what was the amount of net income earned by Josephine's Bakery during the current year?

---

Definitions:

Capital Cost Allowance (CCA)

The Capital Cost Allowance (CCA) is a tax deduction available in Canada that represents a yearly depreciation charge for capital assets used in business activities, allowing businesses to write off the cost of assets over time.

Tax Rate

The percentage at which an individual or corporation is taxed on their income or profit.

Required Return

The minimum profit that investors expect to earn on their investment to compensate for the risk taken.

Initial Cash Flow

Refers to the initial amount of money spent or received at the start of a project or investment.