Jerry's Butcher Shop had the following assets and liabilities at the beginning and end of the current year:Assets LiabilitiesBeginning of the year $114,000 $68,000End of the year 135,000 73,000If stockholders invested an additional $12,000 in the business during the year in exchange for common stock, but no dividends were paid during the year, what was the amount of net income earned by Jerry's Butcher Shop?
What will be an ideal response?
Beginning equity = $114,000 ? $68,000 = $46,000
Ending equity = $135,000 ? $73,000 = $62,000
Increase in equity = $62,000 ? $46,000 = $16,000
Net income = $16,000 ? $12,000 = $4,000
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