Ulect of net income on a fim\'s balance sheet Conad , Inc, reported net i ncome
ID: 1172231 • Letter: U
Question
Ulect of net income on a fim's balance sheet Conad , Inc, reported net i ncome of $1,359 000 for the year ended December 31, 2016. Show how Conrads balance sheet would n the scenarios that change trom 2015 EEE to 2016 drpending on how Conrad "spenr hore b. Conrad paid dividends totaling $500,000 and used the balance of the net income to C. Conrad paid dividends totaling 5500 000 and invested the balance of the net retire (pay off) long-lerm deltt income in building a new hangar 0 Data Table d.Convad paid ou all $1.369000 dvdends tots stooohn it Corrad paid no dividends aring he year and invested the tuands in markble secuities, the amount transtered The ending marketable securities l be(Round to the nearest doti) The ending retained earnings wilbe(Round to the nearest dolla b. "Conrad paid dividends ttaing $500,000 and used the balance ofthe net income to retepay an iongterm debt me ?mut transferred to the The endng longterm dett wil be?(Rord to the nearest dolar) nnenang retained earmp wil be?(Round to the nearest dolar) c. f Corad pad dividends totaing $500,000 and nvested the baiance of the net income in building a new hangar, the amount ransterred to the balance sheet wit be s The ending buitangs wit b Round to the newrest oar) The enog retared eanings wil be S? (Rondine nearest elar t. It Conrad paid out all $1,359 000 as dividends to ts stocknolders, the amount transtemed to the balance sheet beRound to the nearest da The ending retaned eanings wl be Round to the nearest dolar mer your answer in each of te ???wer bores to the balance sheet will be Round to the neare y ts conterts toa soreat copy ts contents into a spreatsneet) Conrad Air,Inc. Balance Sheet as of December 31, 205 $120,000 Cument ansets Equipment Buildings Flxed asset Total assets Short-term nones Long term debt Common stock Retaned eamngs Total tablites and equtyExplanation / Answer
a) Net Income for 2016 is $1359000 Entry: Debit $ Credit $ The ending marketable securities will be = 30000 + 1359000 = 1389000 Marketable securities 1359000 The ending retained earnings will be = 1579000 + 1359000 = 2938000 Retained earnings 1359000 b) Entry: Debit $ Credit $ the ending long-term debt will be = 2664000 - 859000 = 1805000 Dividend 500000 The ending retained earnings will be = 1579000 + 859000 = 2438000 Long term debt 859000 Cash 500000 Retained Earnings 859000 c) the ending buildings will be = 1597000 + 859000 = 2456000 Entry: Debit $ Credit $ The ending retained earnings will be = 1579000 + 859000 = 2438000 Dividend 500000 Buildings 859000 Cash 500000 Retained Earnings 859000 d) Entry: Debit $ Credit $ The amount transferred to the balance sheet will be = 0 Dividend 1359000 the ending retained earnings will be = 0 Cash 1359000
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