For Pinnacle Incorporated, what amount of capital would be reported for 2014? Wh
ID: 2419244 • Letter: F
Question
For Pinnacle Incorporated, what amount of capital would be reported for 2014? What amounts of payroll expense and inventory would be reported for 2015? What amount of retained earnings would be reported for January 1, 2015?
Pinnacle Incorporated was founded on January 1, 2013; since then, the company has been fairly successful; however, in an effort to save some money, the president has been keeping track of the financial records rather than hiring a professional accountant. Although some data is missing, a comparative report of year-end account balances appears below; unless otherwise noted, all numbers are as of December 31st for each year after all transactions have been summarized.
2015
2014
Accounts payable
124,610
120,890
Accounts receivable
20,812
14,388
Capital
263,128
?
Cash
13,010
41,788
Cost of Goods Sold
208,902
197,732
Dividends
3,632
5,880
Payroll expense
?
936
Inventory
?
100,082
Notes payable
252,160
263,270
Property, plant and equipment
570,520
525,160
Retained earnings, Jan. 1
?
45,238
Retained earnings, Dec. 31
61,686
53,620
Revenues
257,908
252,568
Selling and administrative expenses
36,122
39,638
2015
2014
Accounts payable
124,610
120,890
Accounts receivable
20,812
14,388
Capital
263,128
?
Cash
13,010
41,788
Cost of Goods Sold
208,902
197,732
Dividends
3,632
5,880
Payroll expense
?
936
Inventory
?
100,082
Notes payable
252,160
263,270
Property, plant and equipment
570,520
525,160
Retained earnings, Jan. 1
?
45,238
Retained earnings, Dec. 31
61,686
53,620
Revenues
257,908
252,568
Selling and administrative expenses
36,122
39,638
Explanation / Answer
capital reported for 2014
capital = Account receivable +cash+ inventory + Property, plant and equipment- account payable - Notes payable - Retained earnings, Dec. 31
= 14,388+ 41,788 + 100,082 + 525,160 - 120,890- 263,270 - 53,620
=243638
Amount of retained earnings reported for January 1, 2015 = 53,620
Amounts of inventory reported for 2015=
Inventory = capital + account payable + Notes payable + Retained earnings, Dec. 31 - Account receivable - cash - Property, plant and equipment
= 263,128 + 124,610 + 252,160 + 61,686 - 20,812 - 13,010 - 570,520
=97242
Amounts of payroll expense reported for 2015 =
Revenue - COGS - Selling and administrative expenses - profit
=257,908 - 208,902 - 36,122 - (61,686- 53,620 +3,632)
= 1186
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