Key Relations: Revenues, Expenses, Dividends, and Retained Earnings Compute the
ID: 2818307 • Letter: K
Question
Key Relations: Revenues, Expenses, Dividends, and Retained Earnings Compute the missing amounts in the following table. At the end of 2015, retained earnings had a balance of negative $2,086. (Round to one decimal point. Hint: Dividends reduce the retained earnings account.) 2013 2014 2015 Retained earnings (beginning) $(1,746.5) $(1,830.5) 5,327.0 5,628.0 $(2,653.0) Revenues 4,840.5 Expenses 5,425.0 Dividends 17.5 (b) Calculate expenses as a percentage of revenues for the three years. Round your answer to one decimal place. 2013 2014 2015 105.7 % X% (c) Calculate net income as a percentage of revenues for the three years. Round your answer to one decimal place. Use negative signs with answers when appropriate. 2013 2014 2015 X%Explanation / Answer
1)Retained earning at beginning of any year is the ending balance of last year .so beginning balance of RE at 2015 will be the ending balance of RE at 2014
A)RE at end = RE at beg +net income -dividend
2015:-2086 = -2653 +[R- 5425] -17.5
-2086 = -2653 + R -5425 -17.5
-2086 = -8095.5+R
R = -2086+8095.5
= 6009.5
Revenue for 2015 = 6009.5
2)2014: -2653 = -1830.5 +[5327-5628]-D
-2653 = -1830.5 - 301- D
-2653 = - 2131.5-D
D = -2131.5 +2653
= 521.5
3)2013: -1830.5 = -1746.5+[4840.5-E] -0
-1830.5 = -1746.5 +4840.5 - E
-1830.5 = 3094- E
E = 3094 +1830.5
= 4924.5
Expense 2013 = 4924.5
b)
c)
[4840.5-4924.5]/4840.5
-84/4840.5
[5327-5628]/5327
-301/5327
2013 2014 2015 expense % of revenue expense /revenue 4924.5/4840.5 5628/5327 5425/6009.5 101.7% 105.7% 90.3%Related Questions
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