The following information was drawn from the accounting records of Swanson Company as of December 31, 2014, before the temporary accounts had been closed. The Cash balance was $3,410, and Notes Payable amounted to $20,200. The company had revenues of $4,180 and expenses of $2,910. The company’s Land account had a $4,500 balance. Dividends amounted to $200. There was $1,300 of common stock issued.
Required
a. Identify which accounts would be classified as permanent and which accounts would be classified as temporary.
b. Assuming that Swanson’s beginning balance (as of January 1, 2014) in the Retained Earnings account was $3,900, determine its balance after the temporary accounts were closed at the end of 2014.
c. What amount of net income would Swanson Company report on its 2014 income statement?