During 2013, Moore Corporation paid $14,000 of dividends. Moore's assets, liabilities, and common stock at the end of 2012 and 2013 were:
12/31/2012
Total Assets:$144,200
Total Liabilities:$52,600
Common Stock:$60,000
12/31/2013
Total Assets:$178,500
Total Liabilities:$59,700
Common Stock:$60,000
Using the information provided, compute Moore's net income for 2013.
No idea
To calculate Moore Corporation's net income for 2013, we can use the formula:
Net Income = Dividends + Increase in Retained Earnings
To find the increase in retained earnings, we need to know Moore's retained earnings at the end of 2012 and the end of 2013.
Retained Earnings = Total Assets - Total Liabilities - Common Stock
Let's calculate the retained earnings for both years:
Retained Earnings at the end of 2012 = $144,200 - $52,600 - $60,000 = $31,600
Retained Earnings at the end of 2013 = $178,500 - $59,700 - $60,000 = $58,800
Now we can calculate the increase in retained earnings:
Increase in Retained Earnings = Retained Earnings at the end of 2013 - Retained Earnings at the end of 2012
= $58,800 - $31,600
= $27,200
Finally, we can compute the net income for 2013:
Net Income = Dividends + Increase in Retained Earnings
= $14,000 + $27,200
= $41,200
Therefore, Moore Corporation's net income for 2013 is $41,200.