Response to the following problem:
Financial information related to Derby Interiors for October and November 2006 is as follows:
October 31, 2006 November 30, 2006
Accounts payable $12,320 $13,280
Accounts receivable 27,200 31,300
Capital stock 15,000 15,000
Retained earnings ? ?
Cash 48,000 81,600
Supplies 2,400 2,000
a. Prepare balance sheets for Derby Interiors as of October 31 and as of November 30, 2006.
b. Determine the amount of net income for November, assuming that no additional capital stock was issued and no dividends were paid during the month.
c. Determine the amount of net income for November, assuming that no additional capital stock was issued but dividends of $10,000 were paid during the month.