Final answer:
Net Income cannot be determined solely from the given transactions related to a statement of cash flows. However, the bank's net worth, in a separate T-account balance sheet example, is calculated as the difference between assets and liabilities, resulting in a net worth of $220.
Step-by-step explanation:
The subject question concerns preparing a statement of cash flows and determining the Net Income. However, the provided transactions do not directly yield Net Income as it typically comes from the income statement, which aggregates revenue and expenses over a period. To calculate net income for the company, you would need to know all the revenues and expenses for the period, not just the cash transactions. The transactions given (selling equipment, purchasing a vehicle, issuing bonds, paying dividends) are part of cash flows but they don't provide complete information to calculate net income.
In a T-account balance sheet scenario for a bank, which is presented as a separate example, the net worth (or equity) of the bank is calculated by balancing assets against liabilities. For the bank with deposits of $400 (liability), reserves of $50, government bonds worth $70, and loans of $500 (all assets), the net worth would be the difference between total assets and total liabilities.
The T-account balance sheet for the bank would look like this:
- Assets
- Cash Reserves: $50
- Government Bonds: $70
- Loans: $500
- Total Assets: $620
- Liabilities
- Deposits: $400
- Total Liabilities: $400
To calculate the bank's net worth:
Total Assets - Total Liabilities = Net Worth
$620 - $400 = $220
Therefore, the bank's net worth is $220.