Reference no: EM131768433

Carlos Ramirez and Camila Garza organized New World Book Store as a corporation; each contributed $70,100 cash to start the business and received 4,200 shares of common stock. The store completed its first year of operations on December 31, 2014. On that date, the following financial items for the year were determined: December 31, 2014, cash on hand and in the bank, $70,050; December 31, 2014, amounts due from customers from sales of books, $39,500; unused portion of store and office equipment, $75,500; December 31, 2014, amounts owed to publishers for books purchased, $13,500; one-year note payable to a local bank for $3,500, with interest due of $200. No dividends were declared or paid to the stockholders during the year.

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 solve for net income.)