o Questions 810 of 23 E14 Completing a Balance Sheet and Inf

o Questions 8-10 (of 23) E1-4 Completing a Balance Sheet and Inferring Net Income [LO 1-2, LO 1-3] [The following information applies to the questions displayed below.] Ken Young and Kim Sherwood organized Reader Direct as a corporation; each contributed $50,000 cash to start the business and received 4,000 shares of stock. The store completed its first year of operations orn December 31, 2014. On that date, the following financial items for the year were determined: cash on hand and in the bank, $45,500, amounts due from customers from sales of books, $28,000: equipment, $49,000; amounts owed to publishers for books purchased, $8500, one-year note payable to a local bank for $4,500. No dividends were declared or paid to the stockholders during the year. References E1-4 Completing a Balance Sheet and Inferring Net Income [LO 1-2. LO 1-3) Section Break

Solution

Answer E1-4 Part 2 Net income for the year ended December 31,2014 = Ending RE + Dividends - Beginning RE Net income for the year ended December 31,2014 = $9500 + $0 -$0 = $9500 Answer E1-4 Part 4 Ending retained earnings balance at December 31,2015 = Beginning RE + Net Income for 2015 - Dividend paid Ending retained earnings balance at December 31,2015 = $9500 + $8500 - $3100 = $14,900