Baltimore Company experienced a total increase in stockholders' equity of $120,000 during the current year. Stockholders' equity was increased by additional issuances of $59,000 capital stock during the year. No dividends were paid. Expenses incurred during the year were $16,000. How much was Baltimore's revenue for the year?
The Solution:
Total Increase in Equity = $120,000
Increase by Additional Issuance = $59,000
Net Profit ($120,000 - $59,000 ) = $61,000
Expense = $16,000
Revenue ($61,000 - $16,000) = $45,000