The Accounts of Garfield Company Listed with the Increases or Decreases

question 258

Short Answer

The accounts of Garfield Company listed with the increases or decreases that occurred during the past year are as follows.
$$\begin{array} { | l | r | r | } \hline \text { Account } & \text { Increase } & \text { Decrease } \\\hline \text { Cash } & \$ 25,000 & \\\hline \text { Accounts receivable } & & \$ ( 5,000 ) \\\hline \text { Accounts payable } & & ( 11,000 ) \\\hline \text { Notes payable } & 16,000 & \\\hline\end{array}$$
The only items affecting the equity accounts are: net income,an investment of $3,000 by the owner in exchange for stock and dividends of $11,000.Using the balance sheet equation,compute net income for the past year.

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