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Acme Company Balance Sheet As of January 5, 2020 (amounts in thousands) Cash 13,700 Accounts Payable...

Acme Company
Balance Sheet
As of January 5, 2020
(amounts in thousands)
Cash 13,700 Accounts Payable 2,000
Accounts Receivable 3,200 Debt 3,600
Inventory 5,100 Other Liabilities 900
Property Plant & Equipment 15,400 Total Liabilities 6,500
Other Assets 800 Paid-In Capital 7,200
Retained Earnings 24,500
Total Equity 31,700
Total Assets 38,200 Total Liabilities & Equity 38,200

Update the balance sheet above to reflect the transactions below, which occur on January 6, 2020

1. Sell product for $40,000 with historical cost of $32,000

What is the final amount in Retained Earnings?

Note: Transaction amounts are provided in dollars but the balance sheet units are thousands of dollars.

Please specify your answer in the same units as the balance sheet (i.e., enter the number from your updated balance sheet).

Solutions

Expert Solution

Calulation of Gain or Loss on Sale for transaction dated January 06
Sales value of the Product = $40,000
Less: Historical Cost $32,000
Gain on Sale $8,000
Calculation of Final amount of retained Earnings =
Retained Earnings as on Jan 05, 2020 $24,500
Add: Gain on sale of prodcut $8
Final Amount of Retained Earnings $24,508
REVISE BALANCE SHEET
AS OF JANUARY 06,2020
(Amount in Thousnad)
Cash (13,700 + 40) $13,740 Account Payable $2,000
Account Receivable $3,200 Debt $3,600
Inventory( 5100 - 32) $5,068 Other Liabilities $900
Property Plant & Equipment $15,400 Total Liabilities (A) $6,500
Other Assets $800 Paid in Capital $7,200
Retained Earnings $24,508
Total Equity(B) $31,708
Total Assets $38,208 Total Liabilities & Equity(A+B) $38,208

ekkarill92 answered 1 year ago
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