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On January 1, total assets and liabilities had a fair market value of $30,000 and $12,000,...

On January 1, total assets and liabilities had a fair market value of $30,000 and $12,000, respectively. On December 31, total assets and liabilities were $28,000 and $20,000, respectively. During the year, $7,000 of dividends were declared and paid and no stock was purchased or issued. Calculate the amount of net income or loss for the year.

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Answer #1
Equity = Total Assets - Total Liabilities
Equity at the end of the year $           8,000
($28000-20000)
Add:
Dividend Paid $           7,000
Less :
Equity at the beginning of the year $         18,000
($30000-12000)
Net loss $           3,000
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