Question

as of December 31, 2017, Armani Company’s financial records show the following items and amounts. prepare a year end statement of owners’s equity of Am

As of December 31, 2017, Armani Company's financial records show the following items and amounts. Cash $11,100 10,100 7,100 6,100 9,300 18,000 5,100 7,100 14,100 35,200 24,200 21,100 13,100 9,100 Accounts receivable Supplies Equipment Accounts payable Common stock Retained earnings, Dec.31, 2016 Retained earnings, Dec. 31, 2017 Dividends Consulting revenue Rental revenue Salaries expense Rent expense Selling and administrative expenses Required: Prepare a yearend statement of owner's equity for Armani Company. ARMANI COMPANY Statement of Retained Earnings For Year Ended December 31. 2017 Retained earnings. December 31 2016 Retained earnings December 31 2017

Answer 1

Calculation of net income for 2017
Consulting revenue	$35,200
Rental revenue	$24,200
Total revenue	$59,400
Less: Expenses
Salaries expense	$21,100
Rent expense	$13,100
Selling and administrative expense	$9,100
Total expense	$43,300
Net income	$16,100
Retained earnings is accumulated of net income over years. Retained earnings increases with increase in current year net income and decreases with dividend declared by company
Statement of retained earnings for 2017 is shown below
ARMANI COMPANY
Statement of retained earnings
For year ended December 31, 2017
Retained earnings, December 31 2016	$5,100
Add: Net income	$16,100
	$21,200
Less: Dividend	$14,100
Retained earnings, December 31 2017	$7,100
Statement of owner's equity is shown below
ARMANI COMPANY
Statement of owner's equity
For year ended December 31, 2017
Common stock	$18,000
Retained earnings	$7,100
Total owner's equity	$25,100