11) Alpha\'s Company\'s Fiscal Year 2017 Statement of Cash Flows reflected infor

Question

11) Alpha's Company's Fiscal Year 2017 Statement of Cash Flows reflected information that cash provided by operating activities was $800,000. The Fiscal Year 12/31/17 Balance Sheet showed the value of Retained Earnings to be $625,000. The following additional information was provided: Depreciation Expense $380,000 Common Stock Dividends 200,000 Accounts Receivable increase 110,000 Accounts Payable increase 60,000 Use this information and determine Alpha Company's: a. the Net Income (Net Loss) the 2017 Fiscal Year. b. the beginning balance for Retained Earnings

Explanation / Answer

Part 1 :-

As we know that ,

Net income + Depreciation Expense - Accounts Receivable Increase - Accounts Payable Decrease = cash provided by operating activities

Net income + 380000 - 110000 - 60000 = 800000

Net income = $ 590000

Part 2 :-

As we know that ,

Beginning balance for Retained Earnings + Net income - Common Stock Dividends = Closing balance for Retained Earnings

Beginning balance for Retained Earnings + 590000 - 200000 = 625000

Beginning balance for Retained Earnings = $ 235000

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