Question

The summaries of data from the balance sheet, income statement, and retained earnings statement for two corporations, Walco Corporation and Gunther Enterprises, are presented below for 2017.
Determine the missing amounts. Assume all changes in stockholders' equity are due to changes in retained earnings.
Walco Corporation Gunther Enterprises
Beginning of year
Total assets $120,000 $144,000
Total liabilities $ 62,000 $ (d)
Total stockholders' equity $ (a) $ 75,000
End of year
Total assets $ (b) $ 178,000
Total liabilities $ 129,000 $ 51,000
Total stockholders' equity $ 51,100 $ (e)
Changes during year in retained earnings
Dividends $ (c) $ 5,400
Total revenues $219,000 $ (f)
Total expenses $160,000 $82,000

Answer 1

Answer:

Walco Corporation and Gunther Enterprises

Determination of the missing amounts in their balance sheets, income statements, and retained earnings statements for the year ended December 31, 2017:

                                       Walco Corporation      Gunther Enterprises

Beginning of year

Total assets                             $120,000              $144,000

Total liabilities                           $62,000              $ 69,000

Total stockholders' equity     $  58,000               $ 75,000

End of year

Total assets                            $ 180,100              $ 178,000

Total liabilities                       $ 129,000               $ 51,000

Total stockholders' equity    $ 51,100                 $127,000

Changes during year in retained earnings

Dividends                               $65,900                 $ 5,400

Total revenues                     $219,000              $139,400

Total expenses                    $160,000               $82,000

Explanation:

a) Data and Calculations:

                                       Walco Corporation      Gunther Enterprises

Beginning of year

Total assets                             $120,000              $144,000

Total liabilities                           $62,000              $ (d)

Total stockholders' equity     $ (a)                        $ 75,000

End of year

Total assets                            $ (b)                       $ 178,000

Total liabilities                        $ 129,000              $ 51,000

Total stockholders' equity    $ 51,100                  $ (e)

Changes during year in retained earnings

Dividends                              $ (c)                        $ 5,400

Total revenues                     $219,000               $ (f)

Total expenses                    $160,000               $82,000

a (Equity) = total assets - total liabilities = $120,000 - 62,000 = $58,000

b (Assets) = total liabilities + equity = $129,000 + $51,100 = $180,100

c (Dividends) = (total revenues - total expenses) + (beginning equity - ending equity) = $219,000 - 160,000 + 58,000 - 51,100 = $65,900

d (Liabilities) = Total assets - equity = $144,000 - $75,000 = $69,000

e (Equity) = total assets - total liabilities = $178,000 - 51,000 = $127,000

f  (Total revenues) = total expenses + dividends + change in equity

= $82,000 + $5,400 + (127,000 - 75,000)

= $139,400