Expanded Accounting Equation
Response to the following problem:
At the end of 2009, Spencer Systems, Inc., had a fire that destroyed the majority of its accounting records. Spencer Systems, Inc., was able to gather the following financial information for 2009.
a. Retained earnings was changed only as a result of net income and a $25,000 dividend payment to Spencer's investors.
b. All other account changes for the year are listed below. The amount of change for each account is shown as a net increase or decrease.
Increase or(Decrease)
Cash $ 12,500
Interest receivable (7,500)
Inventory 50,000
Accounts receivable (11,750)
Building 157,500
Acccounts Payable 22,500
Mortgage Payable 137,500
Wages payable (35,250)
Capital stock 26,250
Required:
Using the accounting equation, compute Spencer's net income for 2009.