As of December 31, 2016, Moss Company had total cash of $157,000, notes payable

Question

As of December 31, 2016, Moss Company had total cash of $157,000, notes payable of $85,700, and common stock of $52,500. During 2017, Moss earned $37,000 of cash revenue, paid $20,500 for cash expenses, and paid a $3,100 cash dividend to the stockholders Required a. Determine the amount of retained earnings as of December 31, 2016 Retained earnings b. & c. Create an accounting equation and record the beginning account balances, revenue, expense, and dividend events under the appropriate elements of the accounting equation. (Enter any decreases to account balances with a minus sign.) MOSS COMPANY Effect of 2017 Transactions on the Accounting Equation AssetsLiabilities Stockholders' Equity Event Notes Retained Earnings Cash Payable Commo Stock Beginning balance 1. Earned revenue 2. Paid expenses 3. Paid dividend Ending balance

Explanation / Answer

a Retained earnings = 157000-85700-52500= $18800 b Cash Notes Payable Common Stock Retained earnings Beginning balances 157000 85700 52500 18800 Earned revenue 37000 37000 Paid expenses -20500 -20500 Paid dividends -3100 -3100 Ending balance 170400 85700 52500 32200

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