FINANCIAL ACCT.F/UNDERGRADS-W/ACCESS
FINANCIAL ACCT.F/UNDERGRADS-W/ACCESS
1st Edition
ISBN: 9781618531612
Author: Wallace, Nelson, Christensen, Ferris
Publisher: Cambridge
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Chapter 1, Problem 12AE
To determine

Calculate the missing amount in each column of the financial statements.

Expert Solution & Answer
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Answer to Problem 12AE

Calculate the missing amount in each column of the financial statements as follows:

ParticularsABCD
Beginning:
Assets (16)45,00032,000$53,00043,000
Liabilities28,00015,00029,00019,000
Ending:
Assets50,00030,00041,00052,000
Liabilities (8)22,0002,00020,00024,000
During the year:
Sales (4)25,00026,00031,00027,000
Expense12,00022,00012,00019,000
Dividends (12)2,0003,00022,0004,000

Table (1)

Explanation of Solution

Financial statements: Financial statements are condensed summary of transactions communicated in the form of reports for the purpose of decision making.

Working note:

  • Compute the amount of sales revenue.

Compute the beginning stockholders’ equity:

Assets = Liabilities + Stockholders’ EquityStockholders’ Equity(Beginning)}=AssetsLiabilitiesStockholders’ Equity=$45,000$28,000Stockholders’ Equity=$17,000 (1)

Compute the ending stockholders’ equity:

Assets = Liabilities + Stockholders’ EquityStockholders’ Equity=AssetsLiabilitiesStockholders’ Equity=$50,000$22,000Stockholders’ Equity(Ending)}=$28,000 (2)

Compute the net income:

Ending Stockholders' Equity}=[(Beginning Stockholders' Equity + Net Income)Dividends]Net Income=[(Ending Stockholders' Equity+Dividends)(Beginning Stockholders' Equity)]Net Income=($28,000+$2,000)$17,000Net Income=$13,000 (3)

Compute the amount of sales revenue:

Net Income = Sales revenueExpensesSales revenue=Net Income+ExpensesSales revenue=$13,000+$12,000Sales revenue=25,000 (4)

Therefore, the amount of sales revenue is $25,000.

  • Compute the amount of ending liability:

Compute the beginning stockholders’ equity:

Assets = Liabilities + Stockholders’ EquityStockholders’ Equity=AssetsLiabilitiesStockholders’ Equity=$32,000$15,000Stockholders’ Equity(Beginning)}=$17,000 (5)

Compute the amount of net income:

Net Income = Sales revenue Expenses=$26,000$12,000=$14,000 (6)

Compute the amount of ending stockholders’ equity:

Ending Stockholders' Equity}=[( Beginning Stockholders'Equity+Net Income)Dividends]=($17,000+$14,000)$3,000=$28,000 (7)

Compute the ending liabilities:

Assets = Liabilities + Stockholders’ EquityLiabilities=AssetsStockholders’ EquityLiabilities=$30,000$28,000Liabilities(Ending)}=$2,000 (8)

Therefore, the amount of ending liability is $2,000.

  • Calculate the amount of dividends paid or declared during the year:

Compute the beginning stockholders’ equity:

Assets = Liabilities + Stockholders’ EquityStockholders’ Equity=AssetsLiabilitiesStockholders’ Equity=$53,000$29,000Stockholders’ Equity(Beginning)}=$24,000 (9)

Compute the ending stockholders’ equity:

Assets=Liabilities+Stockholders’ EquityStockholders’ Equity=AssetsLiabilitiesStockholders’ Equity=$41,000$20,000Stockholders’ Equity(Ending)}=$21,000 (10)

Compute the amount of net income:

Net Income = Sales revenue Expenses=$31,000$12,000=$19,000 (11)

Compute the amount of dividend:

Ending Stockholders' Equity}=[( Beginning Stockholders'Equity+Net Income)Dividends]Dividends=[(Beginning Stockholders'Equity+Net Income)(Ending Stockholders'Equity)]Dividends =($24,000+$19,000)$21,000Dividends=$22,000 (12)

Therefore, the amount of dividend is $22,000.

  • Compute the amount of beginning assets.

Compute the ending stockholders’ equity:

Assets = Liabilities + Stockholders’ EquityStockholders’ Equity=AssetsLiabilitiesStockholders’ Equity=$52,000$24,000Stockholders’ Equity(Ending)}=$28,000 (13)

Compute the amount of net income:

Net Income = Sales revenue Expenses=$27,000$19,000=$8,000 (14)

Compute the amount of beginning stockholders’ equity:

Ending Stockholders' Equity }=[( Beginning Stockholders'Equity+Net Income)Dividends]Beginning Stockholders' Equity}=[(Ending Stockholders'Equity+Dividends)Net Income]Stockholders' Equity=($28,000+$4,000)$8,000Stockholders' Equity=$24,000 (15)

Compute the amount of beginning assets.

Assets = Liabilities + Stockholders’ Equity=$19,000+$24,000=$43,000 (16)

Therefore, the amount of beginning assets is $43,000.

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Chapter 1 Solutions

FINANCIAL ACCT.F/UNDERGRADS-W/ACCESS

Ch. 1 - Prob. 11SSQCh. 1 - Prob. 12SSQCh. 1 - Prob. 13SSQCh. 1 - Prob. 1QCh. 1 - Prob. 2QCh. 1 - Prob. 3QCh. 1 - Prob. 4QCh. 1 - Prob. 5QCh. 1 - Prob. 6QCh. 1 - Prob. 7QCh. 1 - Prob. 8QCh. 1 - Prob. 9QCh. 1 - Prob. 10QCh. 1 - Prob. 11QCh. 1 - Prob. 12QCh. 1 - Prob. 13QCh. 1 - Prob. 14QCh. 1 - Prob. 15QCh. 1 - Prob. 16QCh. 1 - Prob. 17QCh. 1 - Prob. 18QCh. 1 - Prob. 19QCh. 1 - Prob. 20QCh. 1 - Prob. 21QCh. 1 - Prob. 22QCh. 1 - Prob. 23QCh. 1 - Prob. 1SECh. 1 - Prob. 2SECh. 1 - Prob. 3SECh. 1 - Prob. 4SECh. 1 - Prob. 5SECh. 1 - Prob. 6SECh. 1 - Prob. 7SECh. 1 - Prob. 8SECh. 1 - Prob. 9SECh. 1 - Prob. 10SECh. 1 - Prob. 11SECh. 1 - Prob. 12SECh. 1 - Prob. 13SECh. 1 - Prob. 14SECh. 1 - Prob. 15SECh. 1 - Prob. 16SECh. 1 - Prob. 17SECh. 1 - Prob. 18SECh. 1 - Prob. 19SECh. 1 - Prob. 20SECh. 1 - Prob. 21SECh. 1 - Prob. 1AECh. 1 - Prob. 2AECh. 1 - Prob. 3AECh. 1 - Prob. 4AECh. 1 - Prob. 5AECh. 1 - Prob. 6AECh. 1 - Prob. 7AECh. 1 - Prob. 8AECh. 1 - Prob. 9AECh. 1 - Prob. 10AECh. 1 - Prob. 11AECh. 1 - Prob. 12AECh. 1 - Prob. 13AECh. 1 - Prob. 14AECh. 1 - Prob. 15AECh. 1 - Prob. 16AECh. 1 - Prob. 17AECh. 1 - Prob. 18AECh. 1 - Prob. 19AECh. 1 - Prob. 20AECh. 1 - Prob. 1BECh. 1 - Prob. 2BECh. 1 - Prob. 3BECh. 1 - Prob. 4BECh. 1 - Prob. 5BECh. 1 - Prob. 6BECh. 1 - Prob. 7BECh. 1 - Prob. 8BECh. 1 - Prob. 9BECh. 1 - Prob. 10BECh. 1 - Prob. 11BECh. 1 - Prob. 12BECh. 1 - Prob. 13BECh. 1 - Prob. 14BECh. 1 - Prob. 15BECh. 1 - Prob. 16BECh. 1 - Prob. 17BECh. 1 - Prob. 18BECh. 1 - Prob. 19BECh. 1 - Prob. 20BECh. 1 - Prob. 1APCh. 1 - Prob. 2APCh. 1 - Prob. 3APCh. 1 - Prob. 4APCh. 1 - Prob. 5APCh. 1 - Prob. 6APCh. 1 - Prob. 7APCh. 1 - Prob. 8APCh. 1 - Prob. 9APCh. 1 - Prob. 10APCh. 1 - Prob. 11APCh. 1 - Prob. 1BPCh. 1 - Prob. 2BPCh. 1 - Prob. 3BPCh. 1 - Prob. 4BPCh. 1 - Prob. 5BPCh. 1 - Prob. 6BPCh. 1 - Prob. 7BPCh. 1 - Prob. 8BPCh. 1 - Prob. 9BPCh. 1 - Prob. 10BPCh. 1 - Prob. 11BPCh. 1 - Prob. 1SPCh. 1 - Prob. 1EYKCh. 1 - Prob. 2EYKCh. 1 - Prob. 3EYKCh. 1 - Prob. 4EYKCh. 1 - Prob. 5EYKCh. 1 - Prob. 6EYKCh. 1 - Prob. 7EYKCh. 1 - Prob. 8EYKCh. 1 - Prob. 9EYKCh. 1 - Prob. 10EYKCh. 1 - Prob. 11EYKCh. 1 - Prob. 12EYK
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