ent Exercise 2-5 Your answer is partially correct. Try again. These items are ta
ID: 2335317 • Letter: E
Question
ent Exercise 2-5 Your answer is partially correct. Try again. These items are taken from the financial statements of Pharoah Company at December 31, 2017 Buildings $135,424 16,128 4,096 15,155 105,472 78,336 998 6,784 3,328 76,800 51,199 58,368 12.160 119,808 23,962 4,608 18,816 Accounts receivable Prepaid insurance Cash Equipment Land Insurance expense Depreciation expense Interest expense Common stock Retained earnings (January 1, 2017) Accumulated depreciation-buildings Accounts payable Notes payable Accumulated depreciation-equipment Interest payable Service revenueExplanation / Answer
1. Calculation of retained earnings at Dec. 31, 2017
Ending retained earnings balance = Beginning retained earning balance + Net income - Dividends paid
Beginning retained earnings balance [Jan. 1, 2017] = $51,199
Net income for the year = $7,706
Dividend declared and paid during the year = Nil
Therefore.
Ending retained earnings balance [Dec. 31, 2017] = $51,199 + $7,706
Ending retained earnings balance [Dec. 31, 2017] = $58,905
2. Total Stockholder's Equity
Total stockholder's equity = Common stock + Retained earnings
Common stock = $76,800
Retained earnings = $58,905
Total stockholder's equity = $76,800 + $58,905
Total stockholder's equity = $135,705
c. Total liabilites and stockholder's equity
Total liabilites and stockholder's equity = Total liabilities + Total stockholder's equity
Total liabilites = $136,576
Total stockholder's equity = $135,705
Total liabilites and stockholder's equity = $136,576 + $135,705
Total liabilites and stockholder's equity = $272,281
Conclusion:
Retained earnings = $58,905
Total stockholder's equity = $135,705
Total liabilites and stockholder's equity = $272,281
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Amount Amount Service revenue $18,816 Expenses: Insurance expense $998 Depreciation expense $6,784 Interest expense $3,328 Total expenses ($11,110) Net Income for the year $7,706Related Questions
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