Question

Can someone explain me how to do these questions. Thank you

1) On July 1, 20X1, three individuals invested $100,000 each to form MIX Corporation and each received 10,000 shares. MIX had total revenues of $15,000 during 20X1 and $40,000 during 20X2. Total expenses for the same periods were $8,000 and $22,000, respectively. Cash dividends paid out to shareholders totalled $6,000 in 20X1 and $12,000 in 20X2. What was the amount of MIX's retained earnings at the end of 20X1 and 20X2?

a) $101,000 and $107,000 respectively

b) $ 7,000 and $18,000 respectively

c) $ 7,000 and $19,000 respectively Chapters 1-3

d) $ 1,000 and $7,000 respectively

2) Brown Corporation reported the following amounts at the end of the first year of operations, December 31, 20X1: share capital $40,000; sales revenue $95,000; total assets $90,000, no dividends, and total liabilities $30,000. Owner's equity and total expenses would be:

a) Shareholders' equity, $60,000 and expenses $75,000.

b) Shareholders' equity, $80,000 and expenses $40,000.

c) Shareholders' equity, $50,000 and expenses $65,000

d) Shareholders' equity, $80,000 and expenses $30,000.

e) Shareholders' equity, $50,000 and expenses $85,000.

5) The December 31, 20X1, balance in retained earnings is $140,000, tax expense is $15,000, net income for 20X1 is $50,000, and dividends declared and paid during the year were $25,000. What was the balance in retained earnings on January 1, 20X1?

a) $190,000 b) $165,000

c) $115,000

d) $90,000

e) None of the above are correct

Answer 1

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