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Required: Using the following table and the equations underlying each of the four basic financial statements, show (a) that the balance sheet is in balance, (b) that net income is properly calculated, (c) what caused changes in the retained earnings account, and (d) what caused changes in the cash account. (Cash outflows should be indicated with a minus sign.) Assets $ 18,200 Liabilities Stockholders' Equity 13,750 4,450 10,500 9,200 1,300 Revenue Expenses Net Income Dividends 500 Beginning Retained Earnings Ending Retained Earnings Cash Flows from Operating Activities Cash Flows from Investing Activities Cash Flows from Financing Activities Beginning Cash Ending Cash 3,500 4,300 1,600 (1,000) (900) 1,000 700 a. Assets = Liabilities + Stockholders' Equity $ 18,200 4,450 $ 13,750 X + b. Net Income = Revenue – Expenses 2$ 1,300 10,500 9,200 3D Ending RE = Beginning RE + Net Income – Dividends C. 4,300 1,300 O- 500 $ Ending Cash = Beginning Cash + CF from Operating Activities + CF from Investing Activities + CF from Financing Activities %3D 3.500 d. $ 700 1,600 X+ (1,000) X+ (900) 1,000 X 3D

Required: Using the following table and the equations underlying each of the four basic financial statements, show (a) that the balance sheet is in balance, (b) that net income is properly calculated, (c) what caused changes in the retained earnings account, and (d) what caused changes in the cash account. (Cash outflows should be indicated with a minus sign.) Assets $ 18,200 Liabilities Stockholders' Equity 13,750 4,450 10,500 9,200 1,300 Revenue Expenses Net Income Dividends 500 Beginning Retained Earnings Ending Retained Earnings Cash Flows from Operating Activities Cash Flows from Investing Activities Cash Flows from Financing Activities Beginning Cash Ending Cash 3,500 4,300 1,600 (1,000) (900) 1,000 700 a. Assets = Liabilities + Stockholders' Equity $ 18,200 4,450 $ 13,750 X + b. Net Income = Revenue – Expenses 2$ 1,300 10,500 9,200 3D Ending RE = Beginning RE + Net Income – Dividends C. 4,300 1,300 O- 500 $ Ending Cash = Beginning Cash + CF from Operating Activities + CF from Investing Activities + CF from Financing Activities %3D 3.500 d. $ 700 1,600 X+ (1,000) X+ (900) 1,000 X 3D

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter1: Accounting And The Financial Statements
Section: Chapter Questions
Problem 12MCQ: Which of the following sentences regarding the statement of cash flows is false? The statement of...
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Required: Using the following table and the equations underlying each of the four basic financial statements, show (a) that the balance sheet is in balance, (b) that net income is properly calculated, (c) what caused changes in the retained earnings account, and (d) what caused changes in the cash account. (Cash outflows should be indicated with a minus sign.) Assets $ 18,200 Liabilities Stockholders' Equity 13,750 4,450 Revenue 10,500 9,200 1,300 Expenses Net Income Dividends 500 Beginning Retained Earnings Ending Retained Earnings Cash Flows from Operating Activities Cash Flows from Investing Activities Cash Flows from Financing Activities Beginning Cash Ending Cash 3,500 4,300 1,600 (1,000) (900) 1,000 700 a. Assets = Liabilities + Stockholders' Equity $ 18,200 V 4,450 X+ 13,750 X b. Net Income = Revenue - Expenses 2$ 1,300 = 10,500 2$ 9,200 c. Ending RE = Beginning RE + Net Income – Dividends 2$ 4,300 O = 3,500 O+ 2$ 1.300 O- I24 500 O d. Ending Cash = Beginning Cash + CF from Operating Activities + CF from Investing Activities + CF from Financing Activities $ 700 O= 1,600 X+ 2$ (1,000) X + I24 (900) X+ I$ 1,000 x
Transcribed Image Text:Required: Using the following table and the equations underlying each of the four basic financial statements, show (a) that the balance sheet is in balance, (b) that net income is properly calculated, (c) what caused changes in the retained earnings account, and (d) what caused changes in the cash account. (Cash outflows should be indicated with a minus sign.) Assets $ 18,200 Liabilities Stockholders' Equity 13,750 4,450 Revenue 10,500 9,200 1,300 Expenses Net Income Dividends 500 Beginning Retained Earnings Ending Retained Earnings Cash Flows from Operating Activities Cash Flows from Investing Activities Cash Flows from Financing Activities Beginning Cash Ending Cash 3,500 4,300 1,600 (1,000) (900) 1,000 700 a. Assets = Liabilities + Stockholders' Equity $ 18,200 V 4,450 X+ 13,750 X b. Net Income = Revenue - Expenses 2$ 1,300 = 10,500 2$ 9,200 c. Ending RE = Beginning RE + Net Income – Dividends 2$ 4,300 O = 3,500 O+ 2$ 1.300 O- I24 500 O d. Ending Cash = Beginning Cash + CF from Operating Activities + CF from Investing Activities + CF from Financing Activities $ 700 O= 1,600 X+ 2$ (1,000) X + I24 (900) X+ I$ 1,000 x
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