TI11 similar to 2 3 If the owners equity in a business is 13

TI1-1 (similar to (2) (3) If the owners\' equity in a business is $130,000 and the liabilities are $120,000, how much are the assets? A company reported monthly revenues of $320,000 and expenses of $65,000. What is the result of operations for the month? Expenses of

Solution

Answer

Assets = Liabilities + Owners’ Equity
280000 = 130000 + Owners’ Equity
Owners’ Equity = 280000 – 130000 = $150000

Assets = Liabilities + Owners’ Equity
Assets = 120000 + 130000
Assets = $250000

Operating Results = Revenues – Expenses
= 320000 – 65000 = $ 255000 Net Income

Note: Net Income = 80000 (revenues) – 20000 (expenses) = $60000

Statement of Retained earnings

Opening Balance

90000

Add: Net Income during the year

60000

150000

Less: Dividend

8000

Closing Balance

142000

Statement of Retained earnings
Opening Balance	90000
Add: Net Income during the year	60000
	150000
Less: Dividend	8000
Closing Balance	142000