Question

(b) The total assets of Splish Brothers Inc. are $59,000. Common stock account is $16,000: dividends are $8,000; revenues, $52.000; and expenses $31.500. What is the amount of the company's total liabilities? Total liabilities $ 30,500

The right answer is displayed but I cannot get the right answer..

Answer 1

Explanation:

1) Revenue - Expense = Net Income

= $ 52,000 - $ 31,500

= $ 20,500

2) Retained Earning Ending Balance:

= Beginning Balance + Net Income - Dividend

= $ 0 + $ 20,500 - $8000

= $ 12,500

3) Stockholder' s Equity:

= Common Stock + Retained Earning

= $ 16,000 + $ 12,500

= $ 28,500

4)

Assets = Liability + Stockholder's Equity = $ 59000 = Liability + $ 28,500 Liability = $ 59000 - $ 28500 Liability = $ 30,500