Question

In: Accounting

8. At the beginning of 2014, Mask Ltd. had a Retained Earnings balance of $31,860. For...

8. At the beginning of 2014, Mask Ltd. had a Retained Earnings balance of $31,860. For the next three years, the firm reported the following net income (loss) and cash dividends declared and paid:

Year:	Net Income (loss):	Cash Dividends:
2014	$9,040	$425
2015	$16,850	$1,220
2016	($3,895)	$0

What would be the balance of Retained Earnings reported on the year-end balance sheet as of 12/31/2016?

	a.	$60,000
	b.	$55,500
	c.	$52,210
	d.	$53,855
	e.	$27,965

-2.

Consider the following list of accounts:

Service Revenue
Deferred Revenue
Inventory
Prepaid Rent
Common Stock
Cost of Goods Sold
Accumulated Depreciation-Equipment
Rent Expense
Retained Earnings
Sales Revenue

How many of these accounts are reported on the income statement?

	a.	Six
	b.	Two
	c.	Four
	d.	Three
	e.	Five

-3. LPM Ltd. uses units produced as its measure of activity. During August, the company budgeted for 48,900 units of output, but actually produced 46,700 units of output. The company uses the following revenue and cost formulas in its budgeting, where q is the number of units of output:

Revenue: $11.60q

Salaries: $31,050 + $2.45q

Supplies: $1.25q

Utilities: $0.60q

Insurance: $23,090

Miscellaneous expenses: $13,800 + $0.21q

The company reported the following actual results for August:


Revenue	$	611,250
Salaries	$	148,360
Supplies	$	55,795
Utilities	$	31,920
Insurance	$	22,100
Miscellaneous expense	$	20,845

The spending variance in August for ‘Supplies’ is:

Expert Solution

Answer- The balance of Retained Earnings would be reported on the year-end balance sheet as of 12/31/2016 = $52210.

Explanation- Ending balance of Retained Earnings on 12/31/2016 = Retained Earnings balance, 01/01/2016 + Net income – Cash dividends paid

= $56105-$3895

= $52210

Where- Retained Earnings balance, 01/01/2016 = Retained Earnings balance, 01/01/2015 + Net income (Net loss) - Cash dividends paid

= $40475 +$16850-$1220

= $56105

Where- Retained Earnings balance, 01/01/2015 = Retained Earnings balance, 01/01/2014 + Net income (Net loss) - Cash dividends paid

= $31860+$9040-$425

= $40475

Answer- Number of accounts are reported on the income statement = Four.

Explanation- Number of accounts are reported on the income statement = Service Revenue, Cost of goods sold, Rent expense, Sales revenue.

Answer- The spending variance in August for ‘Supplies’ is = $2580 Favorable.

Explanation- Spending variance for Supplies = Actual costs – Flexible budget

= $55795 – (46700 units*$1.25 per unit)

= $55795 - $58375

= $2580 Favorable

ekkarill92 answered 2 years ago

the balance in retained earnings at the end of the year is determined by retained earnings...

the balance in retained earnings at the end of the year is determined by retained earnings balance at the ''beginning of the year: a. plus revenues, minus liabilities b. plus net income, minus dividends c. plus assets, minus liabilities d. plus accounts, minus deferrals

Office Depot had common stock of $6,800 and retained earnings of$5,000 at the beginning of...

Office Depot had common stock of $6,800 and retained earnings of $5,000 at the beginning of the year. At the end of the year, the common stock balance is $7,100 and the retained earnings account balance is $5,500. The net income for the year is $980. What is the retention ratio?

At 1 July 2019, the balance in the Retained Earnings account of Melbourne Ltd was $3...

At 1 July 2019, the balance in the Retained Earnings account of Melbourne Ltd was $3 500 000. The company’s share capital at the 1 July 2019 comprises 400 000 6% preference shares issued for $2.00 per share and 1 400 000 ordinary shares fully paid at $1 per share. During the year ended 30 June 2020, the following events occurred: 1. On 1 February 2020, the directors declared and paid an interim ordinary dividend of $124 000 from retained...

Tote Ltd. reported the following balances at January 1, 2014 : Common shares $420,000 Retained earnings...

Tote Ltd. reported the following balances at January 1, 2014 : Common shares $420,000 Retained earnings 30,000 Accumulated other comprehensive income 58,000 During the year Tote earned net income of $200,000 and generated other comprehensive income of $70,000. Instructions Prepare a statement of shareholders’ equity for the year ended December 31, 2014.

The Embroidery Shoppe had beginning retained earnings of $18,670. During the year, the company reported sales...

The Embroidery Shoppe had beginning retained earnings of $18,670. During the year, the company reported sales of $83,490, costs of $68,407, depreciation of $8,200, dividends of $950, and interest paid of $478. The tax rate is 34 percent. What is the retained earnings balance at the end of the year?

P4-1 (Multiple-Step Income, Retained Earnings) The following information is related to Dickinson Company for 2014.Retained earnings...

P4-1 (Multiple-Step Income, Retained Earnings) The following information is related to Dickinson Company for 2014.Retained earnings balance, January 1, 2014 $ 980,000Sales revenue 25,000,000Cost of goods sold 16,000,000Interest revenue 70,000Selling and administrative expenses 4,700,000Write-off of goodwill 820,000Income taxes for 2014 1,244,000Gain on the sale of investments (normal recurring) 110,000Loss due to fl ood damage—extraordinary item (net of tax) 390,00Loss on the disposition of the wholesale division (net of tax) 440,000Loss on operations of the wholesale division (net of tax) 90,000...

1. beginning common stock balance is $40,000 retained earnings balance is $50,000, investments through stock issuances...

1. beginning common stock balance is $40,000 retained earnings balance is $50,000, investments through stock issuances are $20,000, net income is $30,000, and devidends are $10,000. What is total ending equaity? 2. What journal entry does a company normally make to record payment of cash for future insurance coverage? a. Debits Cash and credits insurance expense. b. debits insurance expense and credits cash. c. debits insurance expense and credits prepaid insurance. d. debits prepaid insurance and credits cash.

In 2007, AutoZone had a negative balance in its Retained Earnings and Shareholder’s Equity accounts. Is...

In 2007, AutoZone had a negative balance in its Retained Earnings and Shareholder’s Equity accounts. Is this an indication that the firm’s long-term survival is at stake? Should they place a priority on improving the negative positions in these 2 seconds? Explain.

On January 1, 2019, Kittson Company had a retained earnings balance of $218,600. It is subject...

On January 1, 2019, Kittson Company had a retained earnings balance of $218,600. It is subject to a 30% corporate income tax rate. During 2019, Kittson earned net income of $67,000, and the following events occurred: 1. Cash dividends of $3 per share on 4,000 shares of common stock were declared and paid. 2. A small stock dividend was declared and issued. The dividend consisted of 600 shares of $10 par common stock. On the date of declaration, the market...

On January 1, 2016, Kittson Company had a retained earnings balance of $218,600. It is subject...

On January 1, 2016, Kittson Company had a retained earnings balance of $218,600. It is subject to a 30% corporate income tax rate. During 2016, Kittson earned net income of $67,000, and the following events occurred: Oct. 1 Cash dividends of $3 per share on 4,000 shares of common stock were declared. Oct. 10 October 1 declaration of dividends was paid. Nov. 1 A small stock dividend was declared. The dividends consisted of 600 shares of $10 par common stock....