Question

15-AI Balance Sheet Equation For each of the following independent cases, compute the amounts (in thousands) for the items indicated by letters, and show your supporting computations: 1 $140 120 Case 2 $ K 170 3 $300 270 Q 35 Revenues Expenses Dividends declared Additional investment by stockholders Net income Retained earnings Beginning of year End of year Paid-in capital Beginning of year End of year Total assets Beginning of year End of year Total liabilities Beginning of year End of year 275

Answer 1

Accounting equations are presented in an attachment.

Summary of answers are:

A=15,000

B=5,000

C=25,000

D=60,000

E=20,000

J=70,000

K=190,000

H=40,000

F=155,000

G=165,000

P=30,000

Q=10,000

N=50,000

L=140,000

M=290,000

Accounting Equations Expenses Net Income Income statement Equation Retained Earnings Equation End of the = year End of the = year Paid in Capital Equation Revenue Beginning of the year Beginning of the year Total Assets at beginning of year Total Assets at End of year Paid in Capital at beginning of + Net Income Dividends Additional Investment + Investment - sold Equity at Liabilities at beginning of beginning of year + year Liabilities at End of Equity at End = year + of year Balance sheet Equation Balance sheet Equation Equity Equation year Retained Earnings + at beginning of year Retained Earnings + at End of year Paid in Capital at End of year Equity Equation

Case 1 A Paid in Capital at beginning of Retained Earnings + at beginning of year year Equity Equation Equity at beginning of the year 25,000 + 40,000 Total Assets at beginning of Liabilities at year = beginning of year 65,000 Equity at beginning of + year Balance sheet Equation 80,000 = A + 65,000 Liabilities at beginning of year 15,000 E Income statement Equation Revenue Expenses Net Income Net Income 120,000 = 20,000 140,000 - 20,000 E D Beginning of the year End of the year + Net Income -Dividends Retained Earnings Equation Retained Earnings at the end of year D 20,000 60,000 40,000 + 60,000 Beginning of the year Additional + Investment Investment - sold End of the year Paid in Capital Equation 25,000 + 25,000 Paid in capital end of year C 25,000 B Paid in Capital at End of year Retained Earnings + at End of year Equity Equation + D Equity at end of year 25,000 + 60,000 85,000 Total Assets at Liabilities at End of Equity at End End of year = year + of year Balance sheet Equation 85,000 90,000 = B 5,000

Case 2 K Income statement Equation Revenue Expenses Net Income 170,000 20,000 190,000 Beginning of the year End of the = year + Net Income Dividends Retained Earnings Equation Retained earnings at end of year 20,000 - 5,000 = 70,000 55,000 + 70,000 J H Beginning of the year Additional + Investment Investment - sold End of the = year Paid in Capital Equation Paid in capital at end of year H 30,000 - 40,000 10,000 + 40,000 F Paid in Capital at beginning of Retained Earnings + at beginning of year Equity Equation year Equity at beginning of year 10,000 + 55,000 = 65,000 Total Assets at beginning of year Liabilities at beginning of year Equity at beginning of + year Balance sheet Equation 90,000 + 65,000 155,000 Paid in Capital at End of year Retained Earnings + at End of year Equity Equation 70,000 Equity at end of year 40,000 110,000 Total Assets at End of year Liabilities at End of Equity at End = [year + of year Balance sheet Equation 110,000 275,000 = 6 165,000

Case 3 Income statement Equation Revenue Expenses Net Income 270,000 30,000 300,000 30,000 Q End of the Retained Earnings Equation Beginning of the year Net Income Dividends year 90,000 + P 110,000 30,000 - 110,000 90,000 + 10,000 N Beginning of the year Additional + Investment Investment - sold End of the = year Paid in Capital Equation 35,000 - 85,000 N 50,000 L Paid in Capital at beginning of Retained Earnings + at beginning of year Equity Equation year Equity at beginning of year N 90,000 L 90,000 50,000 + 140,000 L Paid in Capital at End of year M Retained Earnings + at End of year Equity Equation Equity at end of year Equity at end of year 85,000 + 110,000 195,000 Total Assets at Liabilities at End of End of year = year Equity at End + of year Balance sheet Equation M 95,000 + 195,000 M 290,000