Question

You are interviewing for an entry-level financial analyst position with Wayne Industries. Bruce Wayne, the senior partner, wants to be sure all the people he hires are very familiar with basic accounting principles. He gives you the following data and asks you to fill in the missing information. Each column is an independent case. Month and day reference are for the current year.
Case A Case B
Revenues 200,000
Expenses 70,000
Net Income
Retained Earnings, Jan 1 300,000 100,000
Dividends Paid 70,000 30,000
Retained Earnings, Dec 31 270,000
Current Assets, Dec 31 80,000
Non-current Assets, Dec 31 180,000
Total Assets, Dec 31 410,000
Current Liabilities, Dec 31
Total Liabilities, Dec 31 140,000
Total Stockholder's Equity, Dec 31 210,000

Answer 1

Answer:

                                                                   Case A           Case B

Revenues                                                  200,000        $110,000

Expenses                                                  $160,000       70,000

Net Income                                                 $40,000       $40,000

Retained Earnings, Jan 1                          300,000        100,000

Dividends Paid                                            70,000         30,000

Retained Earnings, Dec 31                       270,000        $110,000

Current Assets, Dec 31                               80,000       $230,000

Non-current Assets, Dec 31                    $710,000        180,000

Total Assets, Dec 31                               $930,000       410,000

Current Liabilities, Dec 31                            40,000        60,000

Noncurrent liabilities                               $100,000      $140,000

Total Liabilities, Dec 31                              140,000      $200,000

CS and APIC                                               520,000      100,000

Total Stockholder's Equity, Dec 31         $790,000      210,000

case a:

retained earnings = previous balance + net income - dividends

net income = $270,000 - $300,000 + $70,000 = $40,000

expenses = revenue - net income = $200,000 - $40,000 = $160,000

total stockholders' equity = CS + APIC + retained earnings = $520,000 + $270,000 = $790,000

total assets = total equity + total liabilities = $790,000 + $140,000 = $930,000

noncurrent liabilities = total liabilities - current liabilities = $140,000 - $40,000 = $100,000

noncurrent assets = total assets - current assets = $790,000 - $80,000 = $710,000

case b:

retained earnings = total equity - CS and APIC = $210,000 - $100,000 = $110,000

net income = $110,000 - $100,000 + $30,000 = $40,000

revenue = net income + expenses = $40,000 + $70,000 = $110,000

current assets = total assets - noncurrent assets = $410,000 - $180,000 = $230,000

total liabilities = total assets - equity = $410,000 - $210,000 = $200,000

noncurrent liabilities = total liabilities - current liabilities = $200,000 - $60,000 = $140,000