Question

Kolander Company has the following accounts and balances at the end of the​ year:

Answer 1

Answer:

The correct answer is $ 49,000. (which is not in options)

Explanation:

This problem requires us to calculate value of retain earning at the end of the year. We know that assets = equity + liabilities and equity = common stock + retain earning. Following this rule we can easily calculate amount of retain earning. Detail Calculation is given below.

Asset

Accounts Receivable $30,000

Land                            $42,000

Investments                  $7,000

Building                       $59,000

Cash and Equivalents $80,000

Equipment                   $64,500

Supplies                        $6,000

Total Asset                  $288,500

Less

Liability

Notes Payable               $59,000

Interest Payable             $5,500

Income Taxes Payable $10,000

Accounts Payable         $38,000

Total Liabilities             $112,500

Less

Equity

Common Stock               $127,000

Retain earning                $ 49,000