Al Shea is the sole owner and operator of Saw Tooth Company. At the end of its accounting period, December 31, 2005, SawTooth Company has assets of $925,000 and liabilities of $285,000. During 2006, Al Shea invested an additional $50,000 and withdrew $30,000 from the business. What is the amount of net income during 2006, assuming that as of December 31, 2006 net assets were $980,000 and liabilities were $225,000?

Answer:amount of net income during 2006 is $65000Step-by-step explanation:Given dataassets in 2005 =  $925,000 liabilities in 2005 =  $285,000invested an additional $50,000withdrew $30,000assets in 2006=  $980,000 and liabilities in 2006 =  $225,000?to find out amount of net income during 2006solutionin 2005 assets =  $925,000 liabilities =  $285,000so stock holder equity = $640000and in 2006assets =  $980,000 and liabilities  =  $225,000so stock holder equity = $725000so retaining earning for both year is $725000 - $640000 i.e $85000so net income = retaining earning + withdrew - investment net income = $85000 + $30,000 -  $50,000 net income = $65000amount of net income during 2006 is $65000