Financial Accounting for Undergr. -Text Only (Instructor's)
Financial Accounting for Undergr. -Text Only (Instructor's)
3rd Edition
ISBN: 9781618531629
Author: WALLACE
Publisher: Cambridge Business Publishers
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Chapter 1, Problem 12BE
To determine

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

Expert Solution & Answer
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Answer to Problem 12BE

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

ParticularsABCD
Beginning:
Assets (16)38,000$22,00038,00041,000
Liabilities28,00015,00029,00019,000
Ending:
Assets40,00036,00044,00050,000
Liabilities (8)22,00028,00020,00024,000
During the year:
Sales (4)26,00026,00031,00027,000
Expense12,00022,00012,00019,000
Dividends (12)2,0003,0004,0004,000

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=$38,000$28,000Stockholders’ Equity=$10,000 (1)

Compute the ending stockholders’ equity:

Assets = Liabilities + Stockholders’ EquityStockholders’ Equity=AssetsLiabilitiesStockholders’ Equity=$40,000$22,000Stockholders’ Equity(Ending)}=$22,000 (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=($22,000+$2,000)$10,000Net Income=$14,000 (3)

Compute the amount of sales revenue:

Net Income = Sales revenueExpensesSales revenue=Net Income+ExpensesSales revenue=$14,000+$12,000Sales revenue=$26,000 (4)

Therefore, the amount of sales revenue is $26,000.

  • Compute the amount of ending liability:

Compute the beginning stockholders’ equity:

Assets = Liabilities + Stockholders’ EquityStockholders’ Equity=AssetsLiabilitiesStockholders’ Equity=$22,000$15,000Stockholders’ Equity(Beginning)}=$7,000 (5)

Compute the amount of net income:

Net Income=Sales revenue Expenses=$26,000$22,000=$4,000 (6)

Compute the amount of ending stockholders’ equity:

Ending Stockholders' Equity}=[( Beginning Stockholders'Equity+Net Income)Dividends]=($7,000+$4,000)$3,000=$8,000 (7)

Compute the ending liabilities:

Assets = Liabilities + Stockholders’ EquityLiabilities=AssetsStockholders’ EquityLiabilities=$36,000$8,000Liabilities(Ending)}=$28,000 (8)

Therefore, the amount of ending liability is $28,000.

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

Compute the beginning stockholders’ equity:

Assets = Liabilities + Stockholders’ EquityStockholders’ Equity=AssetsLiabilitiesStockholders’ Equity=$38,000$29,000Stockholders’ Equity(Beginning)}=$9,000 (9)

Compute the ending stockholders’ equity:

Assets=Liabilities+Stockholders’ EquityStockholders’ Equity=AssetsLiabilitiesStockholders’ Equity=$44,000$20,000Stockholders’ Equity(Ending)}=$24,000 (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 =($9,000+$19,000)$24,000Dividends=$4,000 (12)

Therefore, the amount of dividend is $4,000.

  • Compute the amount of beginning assets.

Compute the ending stockholders’ equity:

Assets = Liabilities + Stockholders’ EquityStockholders’ Equity=AssetsLiabilitiesStockholders’ Equity=$50,000$24,000Stockholders’ Equity(Ending)}=$26,000 (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=($26,000+$4,000)$8,000Stockholders' Equity=$22,000 (15)

Compute the amount of beginning assets.

Assets=Liabilities + Stockholders’ Equity=$19,000+$22,000=$41,000 (16)

Therefore, the amount of beginning assets is $41,000.

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Chapter 1 Solutions

Financial Accounting for Undergr. -Text Only (Instructor's)

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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