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Exercise 1-4 Calculate net income and stockholders' equity [LO2]

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Eagle Corp. operates Magnetic Resonance Imaging (MRI) clinics throughout the Northeast. At the end of the current period, the company reports the following amounts: Assets = $43,500; Liabilities = $20,500; Dividends = $2,140; Revenues = $13,100; Expenses = $8,200.

1) Calculate net income.

2) Calculate stockholders' equity at the end of the period.

Verified Answer :

HomertheGenius
ANet income:
Revenue - Expenses = 13 100 - 8 200 = $4 900
b ) Assets = Liabilities + Shareholders equity ( SE)
SE = A - L = 43 500 - 20 500 = $23 000
The required earnings after dividends:
4 900 - 2 140 = $ 2 760
The Stockholders´ equity: at the end of the period:
23 000 + 2 760 = $ 25 760

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