Homework Sourse1 For each of the independent cases compute the amounts in t
1. For each of the independent? cases, compute the amounts? (in thousands) for the items indicated by letters.
Before completing each? case, define the following financial equations that we will need to solve for the missing amounts. Begin by selecting the formula to calculate net income.
Revenues
-
Expenses
=
Net income
Select the formula to show the change in the retained earnings account.
Beginning retained earnings
+
Net income
-
Dividends
=
Ending retained earnings
Select the formula to show the change in the? paid-in capital account.
Beginning paid-in capital
+
Additional investment
=
Ending paid-in capital
Select the labels of the expanded balance sheet equation.
Liabilities
+
Retained earnings
+
Paid-in capital
=
Total assets
For each of the independent? cases, compute the amounts? (in thousands) for the missing? items, beginning with Case 1.
Case
1
Revenues
$40
Expenses
20
Dividends declared
0
Additional investment by stockholders
0
Net income
20
Retained earnings
Beginning of year
90
End of year
110
Paid-in capital
Beginning of year
35
End of year
35
Total assets
Beginning of year
150
End of year
200
Total liabilities
Beginning of year
25
End of year
55
2
150
130
21
5
20
140
139
45
50
240
375
55
186
3
$330
240
15
40
122
30
250
198
Enter any number in the edit fields and then click Check Answer.
| Revenues | - | Expenses | = | Net income |
Solution
Independent cases Total revenue Total expenses Net Income C=A-B Total assets D Total liabilities E Retained Earnings Dicvident declared ending paid in capital Stockholder Equity Case 1 40 20 20 220 55 130 35 165 (40-20) (55+130+35) 110+20 35+0=35 35+130 Revenue-expense=Net Income Liabilities+Retained Earnings+paid in capital= Total assets Beg RE+Net income-Dividend Beg Paid in capital+Additional investments=ending paid in capital Case 2 150 130 20 375 186 139 50 189 (186+139+50) 45+5 139+50 Liabilities+Retained Earnings+paid in capital= Total assets Beg RE+Net income-Dividend Beg Paid in capital+Additional investments=ending paid in capital Case 3 330 240 90 350 198 122 8 30 162 330-240 198+122+30 40+90-8 122-(40+90) (122+30) Revenue-expense=Net Income Liabilities+Retained Earnings+paid in capital= Total assets Beg RE+Net income-Dividend
