Total liabilities and
stockholders' equity $55,000
Ex. 211 (Cont.)
Income Statement
Revenues $80,000
Cost of goods sold (c)
Administrative expenses 10,000
Net income $ (d)
Retained Earnings Statement
Beginning retained earnings $10,000
Net income (e)
Dividends 5,000
Ending retained earnings $24,000
Instructions
Calculate the missing amounts.
Ans: N/A, LO: 3, Bloom: AN, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Reporting
Solution 211
First note that the retained earnings statement shows that (b) equals $24,000.
Accounts payable + Common stock + Retained earnings = Total liabilities and stockholders' equity
$5,000 + a + $24,000 = $55,000
a + $29,000 = $55,000
a = $26,000 Tot liab. & Stock. equity – (Acct. pay. + End. ret. earn)
Beginning retained earnings + Net income – Dividends = Ending retained earnings
$10,000 + e – $5,000 = $24,000
$5,000 + e = $24,000
e = $19,000 End. ret. earn. + div. – Beg. ret. earn.
From above, we know that net income (d) equals $19,000.
Revenue – Cost of goods sold – Administrative expenses = Net income
$80,000 – c – $10,000 = $19,000
$70,000 – c = $19,000
c = $51,000 Rev. – Admin. exp. – Net inc.(e)
Ex. 212
Sleep Cheap is a private camping ground near the Boulder Peak Recreation Area. It has compiled the following financial information as of December 31, 2022.
Services revenues (from camping fees) $132,000 Dividends $ 8,000