Question

In: Accounting

On November 1 of the current year, Rob Elliot invested $30,500.00 of his cash to form...

On November 1 of the current year, Rob Elliot invested $30,500.00 of his cash to form a corporation, GGE Enterprises Inc., in exchange for shares of common stock. No other common stock was issued during November or December. After a very successful first month of operations, the retained earnings as of November 30 were reported at $5,000.00. After all transactions have been entered into the accounting equation for the month of December, the ending balances for selected items on December 31 follow. On that date, the financial statements were prepared. The balance sheet reported total assets of $54,650.00 and total stockholders' equity of $39,785.00.



Cash ?
Supplies $7, 600
Land $16,000
Accounts Payable ?
Common Stock ?
Fees Earned $27,750
Dividends $5,500
Retained Earnings $5,00
Wages Expense $6,375
Rent Expense ?
Supplies Expense $4,675
Utilities Expense $1,250
Misc. Expense $415


1. What is the amount reported for total liabilities and stockholders’ equity on December 31?  

2. What is the retained earnings amount reported on December 31?  


3. How much does GGE Enterprises Inc. owe to its creditors?  


4. How much cash is being held by GGE Enterprises Inc.?  


5. By what amount did retained earnings increase or decrease during the period?  

6. What is the amount of profit or loss during December?  

7. What were the total expenses for December?  

8. How much was paid for rent?  

Solutions

Expert Solution

GGE Enterprises Inc.
Balance Sheet
December 31
Assets
Cash 31050
Supplies 7600
Land 16000
Total assets 54650
Liabilities
Accounts payable 14865
Stockholders' Equity
Common stock 30500
Retained earnings 9285
Total stockholders' equity 39785
Total liabilities and stockholders' equity 54650
Income Statement
Fees earned 27750
Expenses:
Wages expense 6375
Rent expense 5250
Supplies expense 4675
Utilities expense 1250
Miscellaneous expense 415
Total expense 17965
Net income 9785

Working:

Cash = Total assets - Supplies - Land - $54650 - 7600 - 16000 = $31050
Total liabilities and stockholders' equity = Total assets = $54650
Total liabilities (Accounts Payable) = Total liabilities and stockholders' equity - Total stockholders' equity = $54650 - $39785 = $14865
Retained earnings (ending) = Total stockholders' equity - Common stock = $39785 - $30500 = $9285
Retained earnings (ending) = Retained earnings (beginning) + Net income - Dividends
$9285 = $5000 + Net income - $5500
Net income = $9285 + $5500 - $5000 = $9785
Total expense = Fees earned - Net income = $27750 - $9785 = $17965
Rent expense = Total expense - Wages - Supplies - Utilities - Misc. = $17965 - 6375 - 4675 - 1250 - 415 = $5250
1. Total liabilities and stockholders' equity: $54650
2. Retained earnings: $9285
3. Amount owed to creditors: $14865
4. Cash: $31050
5. Increase in Retained earnings: $4285
6. Profit $9785
7. Total expenses: $17965
8. Paid for rent: $5250

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

On November 1 of the current year, Rob Elliot invested $29,250.00 of his cash to form...
On November 1 of the current year, Rob Elliot invested $29,250.00 of his cash to form a corporation, GGE Enterprises Inc., in exchange for shares of common stock. No other common stock was issued during November or December. After a very successful first month of operations, the retained earnings as of November 30 were reported at $5,000.00. After all transactions have been entered into the accounting equation for the month of December, the ending balances for selected items on December...
On November 1 of the current year, Rob Elliot invested $29,250.00 of his cash to form...
On November 1 of the current year, Rob Elliot invested $29,250.00 of his cash to form a corporation, GGE Enterprises Inc., in exchange for shares of common stock. No other common stock was issued during November or December. After a very successful first month of operations, the retained earnings as of November 30 were reported at $5,000.00. After all transactions have been entered into the accounting equation for the month of December, the ending balances for selected items on December...
On December 1 of the current year, Rob Elliot invested $35,500 of his cash to form...
On December 1 of the current year, Rob Elliot invested $35,500 of his cash to form a proprietorship, GGE Enterprises. After all transactions have been entered into the accounting equation, the following are the ending balances for selected items on December 31. On that date, the financial statements were prepared. The statement of owner’s equity for GGE Enterprises reported Rob Elliot’s owner’s equity as of December 31 at $38,955. The balance sheet reported total liabilities and owner’s equity of $54,400....
GGE Enterprises Inc. On November 1 of the current year, Rob Elliot invested $30,000 of his...
GGE Enterprises Inc. On November 1 of the current year, Rob Elliot invested $30,000 of his cash to form a corporation, GGE Enterprises Inc., in exchange for shares of common stock. No other common stock was issued during November or December. After a very successful first month of operations, the retained earnings as of November 30 were reported at $5,000. After all transactions have been entered into the accounting equation for the month of December, the ending balances for selected...
GGE Enterprises Inc. On November 1 of the current year, Rob Elliot invested $29,500 of his...
GGE Enterprises Inc. On November 1 of the current year, Rob Elliot invested $29,500 of his cash to form a A business organized under state or federal statutes as a separate legal entity.corporation, GGE Enterprises Inc., in exchange for shares of common stock. No other common stock was issued during November or December. After a very successful first month of operations, the retained earnings as of November 30 were reported at $5,000. After all transactions have been entered into the...
In January of the current year, Don and Steve each invested $100,000 cash to form a...
In January of the current year, Don and Steve each invested $100,000 cash to form a corporation to conduct business as a retail golf equipment store. On January 5, they paid Bill, an attorney, to draft the corporate charter, file the necessary forms with the state, and write the bylaws. They leased a store building and began to acquire inventory, furniture, display equipment and office equipment in February. They hired a sales staff and clerical personnel in March and conducted...
XYZ Co. borrows $105,000 cash on November 1 of the current year by signing a 120-day,...
XYZ Co. borrows $105,000 cash on November 1 of the current year by signing a 120-day, 9%, $105,000 note. 1. On what date does this note mature? 1a. What is the amount of interest expense in the current year and the following year from this note? 1b. Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the note at maturity. 1. On what date does this note mature?...
A company’s inventory records report the following in November of the current year: Beginning November 1...
A company’s inventory records report the following in November of the current year: Beginning November 1 6 units @ $6 Purchase November 2 12 units @ $8 Purchase November 12 8 units @ $10 On November 8, it sold 14 units for $36 each. Using the LIFO perpetual inventory method, what was the amount recorded in the cost of goods sold account for the 14 units sold?
1. Rob took the afternoon off from his job as a tire salesman to mow his...
1. Rob took the afternoon off from his job as a tire salesman to mow his lawn. Rob told his wife that this made sense because he would be saving the $50 he would have to pay a lawn service, noting that this would be the opportunity cost to the family. Rob’s wife disagreed. What did Rob’s wife say?    a.   That Rob just wanted to take the afternoon off.    b.   The opportunity cost would be Rob’s lost income...
.    Elliot makes $250,000 a year and pays 30% taxes on $150,000 and 35% on his remaining...
.    Elliot makes $250,000 a year and pays 30% taxes on $150,000 and 35% on his remaining salary. His expenses are $110,000 (per year). He wants to invest a fixed amount EVERY day into an investment fund for 5 years and he hopes to get a 12% return. (20 PTS) a.    What is the maximum amount he can invest every day? (5 PTS) (Find the annual investment amount and divide by 365). b.    What will be the worth of his portfolio after 5...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT