As of Decmeber 31, 2011, Eber Company had a total assets of $156,000, total liab
ID: 2361805 • Letter: A
Question
As of Decmeber 31, 2011, Eber Company had a total assets of $156,000, total liabilities of $85,600, and common stock of $52,400. During 2012 Eber earned $36,000 of cash revenue, paid $20,000 for cash expenses, and paid a $2000 cash dividend to the stockholdersa. determine the amount of retained earnings as of December 32, 2011, after closing
b. determine the amount of net income earned in 2012
c. determine the amount of retained earnings as of December 31, 2012, after closing
d. determine the amount of cash that is in in the retained earnings account as of December 31, 2012
Explanation / Answer
As on 31 Dec'11, Total Assets = $156,000 as per accounting equation, Totl Assets = TotalLiability+ Shareholder Equity So Total Libility + [Common Stock+Retained Earnings] = 156000 So Retained earning as on 31 Dec'11 = 156000-85600-52400 = $18000.....Ans (a) DUring 2012, Cash Rev 36000-Cash Exp 20000= $16000 = Net Income..ans(b) Retained earnings as of Dec31, 2012 = Ret Earnings as on 31 Dec'11+Net Inc-Div Paid = 18000+16000-2000 = $32000............Ans(c) AMount of Cash on 31 Dec'12 = Cash Rev 36000-Cash exp20000-Cash DIv paid 2000 = $14000.....Ans (d)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.