The yearend financial statements of Grunewald Company contai

The year-end financial statements of Grunewald Company contained the following elements and corresponding amounts. Assets = $21,600; Common Stock = $5,000; Revenue = $11,500; Dividends = $680; Beginning Retained Earnings = $3,995; Ending Retained Earnings = $6,485.

The amount of liabilities reported on the end-of-period balance sheet was? and

  

Based on this information, the amount of expenses on Grunewald\'s income statement was?

Solution

Solution: The amount of liabilities reported on the end-of-period balance sheet = $10,115 Expense = $8,3330 Working Notes: Assets = Liabilities + Common Stock + Ending Retained Earnings $21,600 = Liabilities + $5,000 + $6,485 Liabilities = $21,600 - $5,000 -$6,485 Liabilities = $10,115 Beginning retained earnings + Revenue - Expenses - Dividends = Ending retained earnings $3,995 + $11,500 - Expenses - $680 = $6,485 Expenses = $3,995 + $11,500 -$6,485 - $680 =8,330 Expenses = $8,330 Please feel free to ask if anything about above solution in comment section of the question.