Question

Use financial statement relationships to determine missing amounts. (LO 3)

E1-12B The summaries of data from the balance sheet, income statement, and retained earnings statement for two corporations, Yeagen Corporation and Williams’ Enterprises, are presented below for 2014.

	Yeagen	Williams’
	Corporation	Enterprises
Beginning of year
Total assets	$140,000	$230,000
Total liabilities	24,000	(d)
Total stockholders’ equity	(a)	100,000
End of year
Total assets	(b)	280,000
Total liabilities	24,000	140,000
Total stockholders’ equity	136,000	(e)
Changes during year in retained earnings
Dividends	(c)	10,000
Total revenues	300,000	(f)
Total expenses	200,000	100,000

Instructions

Determine the missing amounts. Assume all changes in stockholders’ equity are due to changes in retained earnings.

Answer 1

Answer:

For Yeagen Corporation:

Beginning Stockholders Equity = Beginning Assets - Beginning Liabilities
Beginning Stockholders’ Equity = $140,000 - $24,000
Beginning Stockholders’ Equity = $116,000

Ending Assets = Ending Stockholders’ Equity + Ending Liabilities
Ending Assets = $136,000 + $24,000
Ending Assets = $160,000

Change in Stockholders’ Equity = Ending Stockholders’ Equity - Beginning Stockholders Equity
Change in Stockholders’ Equity = $136,000 - $116,000
Change in Stockholders’ Equity = $20,000

Change in Stockholders’ Equity = Revenues - Expenses – Dividends
$20,000 = $300,000 - $200,000 – Dividends
$20,000 = $100,000 – Dividends
Dividends = $100,000 - $20,000
Dividends = $80,000

For Williams’ Enterprises:

Beginning Total Liabilities = Beginning Total Assets – Beginning Total Stockholders’ Equity
Beginning Total Liabilities = $230,000 - $100,000
Beginning Total Liabilities = $130,000

Ending Stockholders Equity = Ending Total Assets – Ending Total Liabilities
Ending Stockholders’ Equity = $280,000 - $140,000
Ending Stockholders Equity = $140,000

Change in Stockholders’ Equity = Ending Stockholders’ Equity - Beginning Stockholders Equity
Change in Stockholders Equity = $140,000 - $100,000
Change in Stockholders Equity = $40,000

Change in Stockholders’ Equity = Revenues - Expenses – Dividends
$40,000 = Revenues - $100,000 - $10,000
Revenues = $100,000 + $10,000 - $40,000
Revenues = $70,000