Concept explainers
Introduction:
Accounting Equation
Figure (1)
To determine: The missing amounts of Corporation W and G Enterprises.
Answer to Problem 1.16E
Record the missing amounts of Corporation W and G Enterprises.
Title: Missing amounts | ||
Particulars | Corporation W | G Enterprises |
Beginning of year: | ||
Total assets | $110,000 | $150,000 |
Total liabilities | $70,000 | $80,000 (4) |
Total stockholders’ equity | $40,000(1) | $70,000 |
End of year: | ||
Total assets | $180,000(2) | $180,000 |
Total liabilities | $120,000 | $55,000 |
Total stockholders’ equity | $60,000 | $125,000(5) |
Changes during year in retained earnings: | ||
Dividends | $30,000(3) | $5,000 |
Total revenues | $215,000 | $140,000(6) |
Total expenses | $165,000 | $80,000 |
Table (1)
Explanation of Solution
Calculate the amount of stockholders’ equity at the beginning of the year.
Given information: The amount of total assets and total liabilities at the beginning of the year is $110,000 and $70,000 respectively.
Calculation:
Hence, the amount of stockholders’ equity at the beginning of the year of Corporation W is
Calculate the amount of total assets at the end of the year.
Given information: Total liabilities and total stockholders’ at the end of the year is $120,000 and $60,000 respectively.
Hence, the total assets of Corporation W at the end of the year are
Calculate the amount of dividends.
Given information: Total revenue and total expenses is $215,000 and $165,000 respectively.
Step 1: Determine the amount of net income.
Step 2: Determine the amount of change in stockholders’ equity.
Step 3: Determine the amount of dividends.
Hence, the amount of dividends is
Calculate the amount of total liabilities at the beginning of the year.
Given information: Total assets and total stockholders’ equity is $150,000 and $70,000 respectively.
Calculation:
Hence, the amount of total liabilities at the beginning of the year of G Enterprises is
Calculate the amount of total stockholders’ equity at the end of the year.
Given information: Total assets and total liabilities at the end of the year is $180,000 and $55,000 respectively.
Calculation:
Hence, the total stockholders’ equity of G enterprises at the end of the year is
Calculate the amount of revenue.
Step 1: Determine the amount of change in stockholders’ equity.
Step 2: Determine the amount of total revenues.
Hence, total revenue earned by G Enterprises during the year is
Note:
All the changes in amount of stockholders’ equity are caused by changes in retained earnings.
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Chapter 1 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
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