Question

TI1-1 (book/static) ​(1) If the assets of a business are $ 480 comma 000 and the liabilities are $ 160 comma 000​, how much is the​ equity? ​(2) If the equity in a business is $ 160 comma 000 and the liabilities are $ 100 comma 000​, how much are the​ assets? ​(3) A company reported monthly revenues of $ 365 comma 000 and monthly expenses of $ 225 comma 000. What is the result of operations for the​ month? ​(4) If the beginning balance of retained earnings is $ 180 comma 000​, revenue is $ 85 comma 000​, expenses total $ 35 comma 000​, and the company declares and pays a $ 20 comma 000 ​dividend, what is the ending balance of retained​ earnings? g

Answer 1

Answer:

1) Equity = 320,000

2) Assets = 260,000

3) Result of operations for the month = 140,000

4) Ending balance of retained earnings = 210,000

Explanation:

1) Equity = Assets – Liabilities = 480,000-160,000 = 320,000

2) Asset = Liabilities + Equity = 100,000 + 160,000 = 260,000

3) Result of operations for the month = monthly revenues - monthly expenses = 365,000-225,000 = 140,000

4) Ending balance of retained earnings = Beginning balance of retained earnings + Net Income (revenue – expenses) – Dividend = 180,000 + 85,000 – 35,000 – 20,000 = 210,000