Question

In: Accounting

1. For each of the independent? cases, compute the amounts? (in thousands) for the items indicated...

1. For each of the independent? cases, compute the amounts? (in thousands) for the items indicated by letters.

Before completing each? case, define the following financial equations that we will need to solve for the missing amounts. Begin by selecting the formula to calculate net income.

Revenues

-

Expenses

=

Net income

Select the formula to show the change in the retained earnings account.

Beginning retained earnings

+

Net income

-

Dividends

=

Ending retained earnings

Select the formula to show the change in the? paid-in capital account.

Beginning paid-in capital

+

Additional investment

=

Ending paid-in capital

Select the labels of the expanded balance sheet equation.

Liabilities

+

Retained earnings

+

Paid-in capital

=

Total assets

For each of the independent? cases, compute the amounts? (in thousands) for the missing? items, beginning with Case 1.

Case

1

Revenues

$40

Expenses

20

Dividends declared

0

Additional investment by stockholders

0

Net income

20

Retained earnings

Beginning of year

90

End of year

110

Paid-in capital

Beginning of year

35

End of year

35

Total assets

Beginning of year

150

End of year

200

Total liabilities

Beginning of year

25

End of year

55

2

150

130

21

5

20

140

139

45

50

240

375

55

186

3

$330

240

15

40

122

30

250

198

Enter any number in the edit fields and then click Check Answer.

Solutions

Expert Solution

Independent cases Total revenue Total expenses Net Income C=A-B Total assets D Total liabilities E Retained Earnings Dicvident declared ending paid in capital Stockholder Equity
Case 1 40 20 20 220 55 130 35 165
(40-20) (55+130+35) 110+20 35+0=35 35+130
Revenue-expense=Net Income Liabilities+Retained Earnings+paid in capital= Total assets Beg RE+Net income-Dividend Beg Paid in capital+Additional investments=ending paid in capital
Case 2 150 130 20 375 186 139 50 189
(186+139+50) 45+5 139+50
Liabilities+Retained Earnings+paid in capital= Total assets Beg RE+Net income-Dividend Beg Paid in capital+Additional investments=ending paid in capital
Case 3 330 240 90 350 198 122 8 30 162
330-240 198+122+30 40+90-8 122-(40+90) (122+30)
Revenue-expense=Net Income Liabilities+Retained Earnings+paid in capital= Total assets Beg RE+Net income-Dividend

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