Question

BE1-10 Go Ahead Limited began the year with common shares of $100,000 and retained earnings of $350,000. During Calculate endin the year, it issued an additional $25,000 of common shares, reported a profit of $75,000, and paid dividends of $5,000. balances. (a) Calculate the ending balances of (1) common shares. (2) retained carnings, and (3) total shareholders' equity. (SO 4) (b) Explain how your answer would change if the company had reported a loss of $75,000 rather than a profit. Exercises

Answer 1

Cliven - Opening Retained Earning 2 35 0000 Common shake a Iwaw opening additiand issue of Commm 2825000 Shane Profit $75000 Dividend paid SOUD 2 Cooman shaus =$ lwow ) + opening Comman Share Additional issue of Common share 2$ 250vo Endling belence og Comman share 281 25000

Retained Earning z $ 3 Souus opening belence of RE + Profit & 75000 Diuilend Paid Sous N ending balance o RE = $ 420000 GRE Total Shareholdeis Equity, Commm Share = $ 125000 Endling belence of Enching belence of Retained Earning = $ 42000 $545000

b) of company had reported a loss of $75000 Retained Earning opening balance of RE - $ 3500 DO loss Diuiclend Paid =$(75000) >$( Sooo) ending belence 2 8 y RE $ 2700 Total Shareholder's Equity : Ending belence Comman share a 125000 8 g Endling belence y Retained Ecuning 270000 =$395000

> Income Statement a) Sales Revenue b) Supplies c) Dividende -> Statement of finential Position Cash flow statement d) Carn Bouvided by Can flow statement Openting activities e) Total liabilities Statement of finential Position I Canh used for Can flow statement finending actrities g) Salaries expense -> Income Statement h) Commen shone issued - Statement of Change during the year in Equity