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E1-9 Here are incomplete financial statements for Donavan, Inc. DONAVAN, INC. Balance Sheet Liabilities and Stockholders Equity Liabilities Assets Cash Inventory Buildings Total assets $ 7,000 10,000 45,000 $62,000 Accounts payable $ 5,000 Stockholders equity Common stock Retained earnings Total liabilities and stockholders equity $62,000 Income Statement Revenues Cost of goods sold Salaries and wages expense Net income $85,000 10,000 $ (d) Retained Earnings Statement Beginning retained earnings Add: Net income Less: Dividends $12,000 5,000 $27,000 Ending retained earnings Instructions Calculate the missing amounts

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DONAVAN, INC.
INCOME STATEMENT
Particulars Amount
Revenues     85,000
Cost of goods sold    -55,000
Salaries and Wages Expense    -10,000
Net Income     20,000
Cost of Goods sold = Revenue - Net Income - Salaries  
DONAVAN, INC.
RETAINED EARNINGS STATEMENT
Particulars Amount
Beginning retained earnings     12,000
Add: Net Income (b/f)     20,000
Less: Dividends      -5,000
Ending retained earnings     27,000
Net Income = Ending retained earnings + Dividends - Beginning Inventory
DONAVAN, INC.
Assets Liabilities & Stock Holders Equity
Cash         7,000 Liabilities
Inventory       10,000 Accounts Payable            5,000
Buildings       45,000 Stock Holders Equity
Common Stock          30,000
Retained Earnings          27,000
Total Assets       62,000 Total Liabilities & Stock Holders Equity          62,000
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