Question

Below are Balance Sheets for a company at the beginning and end of October.

Beginning-------- End

Cash $15---------- $10

Receivables from clients $5 -------$7

Prepaid Expenses $4 ----------$3

Other Assets $20------- $25

Total $44------- $45

Payables for Expense $8-------- $10

Unearned revenues $4-------- $6

Common Stocki $15--------- $20

Retained Earnings $17------ $9

Total $44------ $45

During the month, expenses incurred were $15 and a dividend of $2 was paid.

a. Revenues earned during October were 9. How did you get this number?

b. Cash received from customers during January was 9. How did you get this number?

Answer 1

Answer a

Beginning Retained earnings	$ 17.0
Add: revenues	x
Less: Expenses	$ (15.0)
Less: Dividends	$   (2.0)
Equals: Ending Retained earnings	$     9.0

$ 17 + x - $15 - $ 2 = 9

x = $9

Answer b

We make an account of Receivables and Unearned revenue.

particulars	Amount	Particulars	Amount
Receivables-Opening balance	$          5	Unearned revenue - Opening balance	$          4
Cash received (Balancing figure)	$          9	Revenues earned	$          9
Unearned revenue - Closing balance	$          6	Receivables-Closing balance	$          7
Total	$        20	Total	$        20

In case of any doubt, please comment.