11-1 (similar to) (1) If the assets of a business are $240,000 and the liabiliti

ID: 2515089 • Letter: 1

Question

11-1 (similar to) (1) If the assets of a business are $240,000 and the liabilities are $120,000, how much is the owners' equity? (2) If the owners' equity in a business is $90,000 and the liabilities are $110,000, how much are the assets? (3) A company reported monthly revenues of $350,000 and expenses of $60,000. What is the result of operations for the (4) If the beginning balance of retained earnings is $170,000, revenue is $1 10,000, expenses total S70.000, and the company declares and pays a $35,000 dividend what is the ending balance of retained earnings? (1) If the assets of a business are $240,000 and the liabilities are $120,000, how much is the owners' equity? In order to calculate owners' equity, we must use the accounting equation. Begin by determining the accounting equation, then solve for owners' equity m Col

Explanation / Answer

Given –

Assets = $240,000

Liabilities = $120,000

The accounting equation is, assets = liabilities + owners’ equity

Owners’ equity = assets – liabilities

Owners’ equity = $240,000 + $120,000 = $120,000

Hence, owners’ equity = $120,000

Given –

Liabilities = $110,000

Owners’ equity = $90,000

The accounting equation is, assets = liabilities + owners’ equity

Assets = $110,000 + $90,000 = $200,000

Hence, Assets = $200,000

Revenues = $350,000

Expenses = $60,000

Result of operations = $350,000 - $60,000 = $290,000

Hence, result of operations = $290,000

retained earnings, beginning balance

$170,000

Add: net income -

revenue

$110,000

less: expenses

$70,000

net income

$40,000

$210,000

Less: Dividends

$35,000

retained earnings, ending balance

$175,000