Question

Excercise1-7,1-8,

paad during the made by the owners Exercise 1-7 The Accounting Equation For cach of the following cases, fill in the blank with the appropriate dollar amount. LOS 3 Case 3 $40.00015.000 20000 20.000 Total assets, end of period Tocal Sabilities, end of period Capital stock, end of period Retained earnings, beginning of period Net income for the period Dividends for the period 75,000 $50000 0.000 10,000 15.000 5,000 6.00010000 9000 8.000 7,000 20,000 10,000 20,000 3.000 8.000 Exercise 1-8 Classification of Financial Statement Items LOS Classify each of the following items according to (1) whether it belongs on the income statement EXAMPLE 1-3,1-4,1-5 (IS) or balance shect (BS) and (2) whether it is a revenue (R), expense (E), asset (A), liability (I.), or stockholders' equity (SE) item. Item Appears on the Classified as BS Example: Cash 1. Salaries expense 2. Equipment 3. Accounts payable 4 Membership fees earned 5. Capital stock 6. Accounts receivable 7. Buildings 8. Advertising expense 9. Retained earmings LOS EXAMPLE 1-5 Exercise 1-9 Classification of Financial Statement Items Regal Entertainment Group operates the largest chain of movie theaters in the U.S. Classify each of the following items found in the company's financial statements included in the Form 10-K for the year ended December 31, 2015, according to (1) whether it belongs on the income state- ment (IS) or balance sheet (BS) and (2) whether it is a revenue (R), expense (E), asset (A),liability (L), or stockholders' equity (SE) item. REAL WOL Appears on the 8S Classified as A. Item Example: Cash and cash equivalents 1. Trade and other receivables, net 2. Clss A common stock 3. Inventories 5. Cost of concessions 6. Equipment 7. Accounts payable 8. Retained earnings 9. Interest expense, net 10. Long-term debt, less current portion

Answer 1

Answer -

EXERCISE 1-7 - THE ACCOUNTING EQUATION

Case 1 : Total liabilities, end of period = $ 9,000.

Working Notes :

1).Retained earnings, end of period =

Beginning balance + Net Income - Dividend

=15,000 + 8,000 - 2,000 = $ 21,000

2).Total liabilities, end of period =

Total Assets, end of period - (Capital stock, end of period + Retained earnings, end of period)

=$ 40,000 - (10,000 + 21,000) = $ 9,000

Case 2 : Total Asset, end of period = $ 34,000.

Working Notes -

1). Retained earnings, end of period =

Beginning balance + Net Income - Dividend paid

= 8,000 + 7,000 - 1,000 = $ 14,000

2). Total Assets, end of period =

Total liabilities, end of period + Capital stock, end of period + Retained earnings, end of period

= 15,000 + 5,000 + 14,000 = $ 34,000

Case 3 : Net income for the period = $ 23,000.

Working Notes

1). Retained earnings, end of period =

Total Assets, end of period  - ( Total liabilities, end of period + Capital stock, end of period )

= $ 75,000 - ( 25,000 + 20,000) = $ 30,000

2). Net income for the period =

Retained Earnings, end of period - Retained earnings, beginning of period + Dividend paid

= $ 30,000 - 10,000 + 3,000 = $ 23,000

Case 4 : Dividend for the period = $ 4,000.

Working Notes -

1). Retained earnings, end of period =

Total Assets - ( Total liabilities + Capital stock )

= $50,000 - ( 10,000 + 15,000) = $ 25,000

2). Dividend for the year =

Retained earnings, beginning of period - Net income + Retained earnings, end of period

= $ 20,000 + 9,000 - 25,000 = $ 4,000

EXERCISE 1-8 - CLASSIFICATION OF FINANCIAL STATEMENT ITEMS

Item	Appears on the	Classified as
Example: Cash	BS	A
1. Salaries Expense	IS	E
2. Equipment	BS	A
3. Accounts payable	BS	L
4. Membership fees earned	IS	R
5. Capital stock	BS	SE
6. Accounts receivable	BS	A
7. Building	BS	A
8. Advertising Expense	IS	E
9. Retained earnings	BS	SE

EXERCISE 1-9 CLASSIFICATION OF FINANCIAL STATEMENT ITEMS

Item	Appears on the	Classified as
1. Trade and other receivables, net	BS	A
2. Class A Common stock	BS	SE
3. Inventories	BS	A
4. Admissions	IS	R
5. Cost of concessions	IS	E
6. Equipment	BS	A
7. Accounts payable	BS	L
8. Retained earnings	BS	SE
9. Interest expense, net	IS	E
10. Long term debt, less current portion	BS	L