Question

The summaries of data from the balance sheet, income statement, and retained earnings statement for two corporations, Walco Corporation and Gunther Enterprises, are presented below for 2017. Determine the missing amounts. Assume all changes in stockholders' equity are due to changes in retained earnings. Walco Corporation Gunther Enterprises Beginning of year Total assets $149,000 $100,000 62,000 Total liabilities (d) 70,000 Total stockholders' equity End of year Total assets 174,000 Total liabilities 60,000 120,000 51,400 Total stockholders' equity Changes during year in retained earnings Dividends 4,600 Total revenues 212,000 Total expenses 166,000 85,000

Answer 1

Walco Corporation:

Total assets, beginning of year = Total liabilities, beginning of year + Total stockholders’ equity, beginning of year
$100,000 = $62,000 + Total stockholders’ equity, beginning of year
Total stockholders’ equity, beginning of year = $38,000

Total assets, end of year = Total liabilities, end of year + Total stockholders’ equity, end of year
Total assets, end of year = $120,000 + $51,400
Total assets, end of year = $171,400

Change in stockholders’ equity = Total stockholders’ equity, end of year - Total stockholders’ equity, beginning of year
Change in stockholders’ equity = $51,400 - $38,000
Change in stockholders’ equity = $13,400

Change in stockholders’ equity = Total revenues - Total expenses - Dividends
$13,400 = $212,000 - $166,000 - Dividends
Dividends = $32,600

Gunther Enterprises:

Total assets, beginning of year = Total liabilities, beginning of year + Total stockholders’ equity, beginning of year
$149,000 = Total liabilities, beginning of year + $70,000
Total liabilities, beginning of year = $79,000

Total assets, end of year = Total liabilities, end of year + Total stockholders’ equity, end of year
$174,000 = $60,000 + Total stockholders’ equity, end of year
Total stockholders’ equity, end of year = $114,000

Change in stockholders’ equity = Total stockholders’ equity, end of year - Total stockholders’ equity, beginning of year
Change in stockholders’ equity = $114,000 - $70,000
Change in stockholders’ equity = $44,000

Change in stockholders’ equity = Total revenues - Total expenses - Dividends
$44,000 = Total revenues - $85,000 - $4,600
Total revenues = $133,600