Torche Corporation Balance Sheet As of December 31 2017 amou

Torche Corporation Balance Sheet As of December 31, 2017 (amounts in thousands) Cash Other Assets Total Assets 30,000 Liabilities 24,000 Equity 54,000 Total Liabilities & Equity 33,000 21,000 54,000 Torche Corporation Income Statement January 1 to March 31, 2018 amounts in thousands) Revenue Expenses Net Income 4,900 3,600 1,300 etween January 1 and March 31, 2018: Cash increases by $100,000 Liabilities increase by $300,000 . Paid-In Capital does not change . Dividends paid of $300,000 Vhat is the value for Other Assets on March 31, 2018? lease specify your answer in the same units as the financial statements.

Solution

Adjustments during the period should be considered here:

Cash = Beginning + Increase in cash – Dividend paid = 30,000 + 100,000 – 300,000 = -$170,000

Liabilities = Beginning + Increase in liabilities = 33,000 + 300,000 = $333,000

Equity = Beginning + Net income – Dividends = 21,000 + 1,300 – 300,000 = -$277,000

All the above figures are balance sheet figures, should appear as at 31/03/2018.

Accounting equation of balance sheet:

Assets = Liabilities + Equity

Cash + Other assets = Liabilities + Equity

(-170,000) + Other assets = 333,000 + (-277,000)

-170,000 + Other assets = 333,000 – 277,000

Other assets = 333,000 – 277,000 + 170,000

                     = 226,000 (Answer)

Checking:

Assets = Cash + Other assets = -170,000 + 226,000 = $56,000

Liabilities + Equity = 333,000 – 277,000 = $56,000

The equation satisfied.