Question

Applying Interrelations of Financial Statements

Fill in the missing amounts, a through t, for each of the three separate companies.

	Case 1	Case 2	Case 3
Net income, 2020	$42,000	h)	$135,000
Retained earnings, December 31, 2020	a)	1,305,000	n)
Retained earnings, December 31, 2019	15,000	1,170,000	381,750
Dividends, 2020	12,000	52,500	o)
Common stock, December 31, 2020	b)	i)	225,000
Total stockholders’ equity, December 31, 2020	168,000	j)	720,000
Other comprehensive income, 2020	c)	0	p)
Accumulated other comprehensive income, December 31, 2019	4,500	0	3,750
Accumulated other comprehensive income, December 31, 2020	3,000	0	q)
Comprehensive income, 2020	d)	k)	154,500
Total assets, December 31, 2020	e)	3,300,000	1,320,000
Total assets, excluding cash, December 31, 2020	f)	l)	1,237,500
Total liabilities, December 31, 2020	138,000	1,350,000	r)
Cash, December 31, 2019	7,500	112,500	s)
Cash, December 31, 2020	15,000	m)	t)
Change in cash, 2020	g)	(15,000)	15,000

Answer 1

	Case 1	Case 2	Case 3
Net income, 2020	$                                          42,000	$                                                    187,500	$                                              135,000
		$1,305,000 - $1,170,000 + $52,500
Retained earnings, December 31, 2020	$                                          45,000	$                                                1,305,000	$                                              471,750
	$15,000 + $42,000 - $12,000		$720,000 - $225,000 - $23,250
Retained earnings, December 31, 2019	$                                          15,000	$                                                1,170,000	$                                              381,750
Dividends, 2020	$                                          12,000	$                                                      52,500	$                                                 45,000
			$381,750 + $135,000 - $471,750
Common stock, December 31, 2020	$                                       120,000	$                                                    645,000	$                                              225,000
	$168,000 - $45,000 - $3,000	$1,950,000 - $1,305,000
Total stockholders’ equity, December 31, 2020	$                                       168,000	$                                                1,950,000	$                                              720,000
		$3,300,000 - $1,350,000
Other comprehensive income, 2020	$                                          (1,500)	$                                                               -	$                                                 19,500
	$4,500 - $3,000		$154,500 - $135,000
Accumulated other comprehensive income, December 31, 2019	$                                            4,500	$                                                               -	$                                                   3,750
Accumulated other comprehensive income, December 31, 2020	$                                            3,000	$                                                               -	$                                                 23,250
			$19,500 + $3,750
Comprehensive income, 2020	$                                          40,500	$                                                    187,500	$                                              154,500
	$42,000 - $1500	$187,500 + $0
Total assets, December 31, 2020	$                                       306,000	$                                                3,300,000	$                                           1,320,000
	$168,000 + $138,000
Total assets, excluding cash, December 31, 2020	$                                       291,000	$                                                3,202,500	$                                           1,237,500
	$306,000 - $15,000	$3,300,000 - $97,500
Total liabilities, December 31, 2020	$                                       138,000	$                                                1,350,000	$                                              600,000
			$1,320,000 - $720,000
Cash, December 31, 2019	$                                            7,500	$                                                    112,500	$                                                 67,500
			$82,500 - $15,000
Cash, December 31, 2020	$                                          15,000	$                                                      97,500	$                                                 82,500
		$112,500 - $15,000	$1,320,000 - $1,237,500
Change in cash, 2020	$                                          (7,500)	$                                                    (15,000)	$                                                 15,000
	$7,500 - $15,000