Question

Use the ledger account balances for Stockton Company below to answer the five parts.

Cash	$7,530
Accounts Receivable (A/R)	2,100
Prepaid Expenses	700
Equipment	13,700
Accumulated Depreciation	1,100
Accounts Payable (A/P)	1,900
Notes Payable (N/P)	4,300
Stock	1,000
Retained Earnings	12,940
Dividends	790
Revenues	9,250
Wages Expense	2,500
Rent Expense	1,960
Utilities Expense	775
Depreciation Expense	250
SG&A Expense	185
Totals	$30,490

a. Determine the net income (loss) for the period.

b. Determine the retained earnings ending balance.

c. Determine the total assets.

d. Determine the current assets.

e. Determine the total liabilities.

Answer 1

a.	Net Income (loss)	$         3,580
b.	Ending Retained earnings	$       15,730
c.	Total assets	$       23,930
d.	Current assets	$       11,330
e.	Total liabilities	$         6,200
	Workings:
	Income Statement
	Sales	$         9,250
Less:	Selling and administrative expenses
	Wages expenses	$        -2,500
	Rent expense	$        -1,960
	Utilities expense	$           -775
	Depreciation expense	$           -250
	SG & A expense	$           -185
	Net Income (loss)	$         3,580
	Beginning Retained earnings	$       12,940
Add:	Net Income	$         3,580
Less:	Dividend paid	$           -790
	Ending Retained earnings	$       15,730
	Balance Sheet
	Assets :
	Current assets
	Cash	$         7,530
	Accounts receivable	$         2,100
	Merchandise Inventory	$         1,000
	Prepaid expense	$             700
	Total Current assets	$       11,330
	Property Plant and Equipment
	Equipment ($13700 - $1100)	$       12,600
	Total assets	$       23,930
	Liabilities and Stock holder's Equity :
	Current Liabilities
	Accounts payable	$         1,900
	Total Current Liabilities	$         1,900
	Long term Liabilities
	Notes Payable	$         4,300
	Total Liabilities	$         6,200