Question

In: Accounting

1 A company began the year with Assets of $200,000, Liabilities of $40,000 and Stockholders' equity...

1

A company began the year with Assets of $200,000, Liabilities of $40,000 and Stockholders' equity of $160,000. During the year Assets increased $110,000 and stockholders' equity increased $50,000. What was the change in Liabilities for the year?

Answer__________________

.2

At the end of last year, the company's assets totaled $1,720,000 and its liabilities totaled $1,480,000. During the current year, the company's total assets increased by $120,000 and its total liabilities increased by $48,000. At the end of the current year, stockholders' equity was

Answer__________________

3

A company began the year with assets of $200,000 and liabilities of $150,000. During the year assets increased by $120,000 and liabilities decreased by $20,000.
  1. What is the amount of stockholder’s equity at the beginning of the year?

__________________

  1. What was the amount of change in stockholders’ equity during the year?

_______________

4 The ending retained earnings balance of Max's Italian Restaurant chain increased by $9.5 million from the beginning of the year. The company had declared a dividend of $2.5 million during the year. What was the net income earned during the year?

Net income________________

Solutions

Expert Solution

Note: Increases are shown as positive amounts and decreases are shown with a negative sign.

1.

Assets = Liabilities + Equity
Beg. Bal. 200000 = 40000 + 160000
During the year 110000 = 60000 + 50000

Answer: $60000 Increase

2.

Assets = Liabilities + Equity
End of last year 1720000 = 1480000 + 240000
During current year 120000 = 48000 + 72000
End of current year 1840000 = 1528000 + 312000

Answer: $312000

3.

Assets = Liabilities + Equity
Beg. Bal. 200000 = 150000 + 50000
During current year 120000 = -20000 + 140000
End of current year 320000 = 130000 + 190000

a. Answer: $50000

b. Answer: $140000 Increase

4. Assuming the beginning retained earnings to be 'X'

Ending retained earnings = X + $9.5

Beginning retained earnings + Net income - Dividends = Ending retained earnings

X + Net income - 2.5 = X + 9.5

Net income = X + 9.5 - X + 2.5

Net income = 12

ekkarill92 answered 1 year ago
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