Columbia Healthcare had an equity balance of $2.5 million at the beginning of the year. At the end of the year, its equity balance was $6.8 million.
a) If Columbia is a not-for-profit organization, what was its net income for the year?
b) Now, assume that Columbia is an investor-owned business. What was its net income for each of the following situations:
- Assuming zero dividends, what was Columbia's net income?
- Assuming $600,000 in dividends, what was its net income?
- Assuming $600,000 in dividends and $500,000 in additional stock sales, what was Columbia's net income?