Terry Lloyd and Joan Lopez organized Read More Store as acorporation; each contributed $50,000 cash to start the businessand received 4,000 shares of common stock. The store completed itsfirst year of operations on December 31, 2006. On that date, thefollowing financial items for the year were determined: December31, 2006, cash on hand and in the bank, $48,900; December 31, 2006,amounts due from customers from sales of books, $25,000; unusedportion of store and office equipment, $49,000; December 31, 2006,amounts owed to publishers for books purchased, $7,000; one-yearnote payable to a local bank for $3,000. No dividends were declaredor paid to the stockholders during the year.
Required:
Complete the following balance sheet as of the end of2006.
What was the amount of net income for the year? (Hint:Use the retained earnings equation [Beginning Retained Earnings +Net Income - Dividends = Ending Retained Earnings] to solvefor net income.)