Question

Input correct answer

At the beginning of its current fiscal year, Willie Corp.'s balance sheet showed assets of $12,400 and liabilities of $5,500. During the year, liabilities decreased by $1,000. Net income for the year was $2,750, and net assets at the end of the year were $7,350. There were no changes in paid-in capital during the year. Required: Calculate the dividends, if any, declared during the year. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.) Answer is complete but not entirely correct. Beginning: Changes: Assets $12,400 $12,400 400 - - = Liabilities $ 5,500 (1,000) Stockholders' Equity PIC + RE 0 + $ 6,900 0 + 2,750 (2,300) $ 7,350 + Net income - Dividends 0 $12,800 4,500 Ending: = $ +

Answer 1

Liabilities +- Beginning Changes Assets = 12,400 = (550) = 5,500 + (1,000) + Stockholders Equity PIC + RE 6,900 2,750 (2,300) 7,350 Net Income Dividends Ending 11,850 4,500 + As per accounting equation, Assets = Liabilities - Stockholders equity Stockholders equity = Paid in capital + Retained earnings Net assets = Total assets - Total liabilities Ending assets balance is = Net assets + Liabilities ending balance