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Missing amounts from balance sheet and income statement data One item is omitted in each of the following summaries of balance sheet and income statement data for the following four different corporations: Determine the missing amounts, identifying them by letter. ( Hint: First determine the amount of increase or decrease in stockholders’ equity during the year.)

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Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

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Chapter
Section
BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Chapter 1, Problem 20E
Textbook Problem
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Missing amounts from balance sheet and income statement data

One item is omitted in each of the following summaries of balance sheet and income statement data for the following four different corporations:

Chapter 1, Problem 20E, Missing amounts from balance sheet and income statement data One item is omitted in each of the

Determine the missing amounts, identifying them by letter. (Hint: First determine the amount of increase or decrease in stockholders’ equity during the year.)

To determine

Identify the missing amounts for the given companies, by the letters.

Explanation of Solution

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Balance sheet: This financial statement reports a company’s resources (assets) and claims of creditors (liabilities) and stockholders (stockholder’s equity) over those resources. The resources of the company are assets which include money contributed by stockholders and creditors. Hence, the main elements of the balance sheet are assets, liabilities, and stockholders’ equity.

a.

Calculate the additional investment of Company F:

ParticularsAmount ($)
Stockholders’ equity at end of year (1)$930,000
Stockholders’ equity at beginning of year (2)$540,000
Increase in stockholders’ equity$390,000
Deduct increase due to net income (3)$330,000
Increase due to additional investments less withdrawals$60,000
Add withdrawals$75,000
Additional common stock issued$135,000

Table (1)

The additional investment of Company F is $135,000.

Working note (1):

Calculate the Stockholders’ equity for Company F at end of year:

Stockholders’ equityat end of year}= Assets at end of yearLiabilities at end of year= $1,260,000 $330,000=$930,000

The stockholder's equity for Company F at the end of the year for is $930,000.

Working note (2):

Calculate the Stockholders’ equity for Company F at beginning of year:

Stockholders’ equityat beginning of year}(Assets at beginningof year)(Liabilities at beginningof year)= $900,000 $360,000=$540,000

The stockholder's equity for Company F at the beginning of the year is $540,000.

Working note (3):

Calculate the Net income for Company F during the year:

Net Income= Revenue  Expenses= $570,000 $240,000=$330,000

The net income of Company F during the year is $330,000.

b.

Calculate the revenue of Company H:

ParticularsAmount ($)
Stockholders’ equity at end of year (4)$455,000
Stockholders’ equity at beginning of year (5)$230,000
Increase in stockholders’ equity$225,000
Add: Withdrawals$32,000
Increase due to additional investment and net income$257,000
Deduct: Additional investment$150,000
Increase due to Net income$107,000
Add expenses$128,000
Revenue$235,000

Table (2)

The revenue of Company H is $235,000.

Working note (4):

Calculate the Stockholders’ equity at end of year for Company H:

Stockholders’ equityat end of year}= Assets at end of yearLiabilities at end of year= $675,000 $220,000=$455,000

The stockholder's equity for Company H at the end of the year is $455,000.

Working note (5):

Calculate the Stockholders’ equity for Company H at beginning of year:

Stockholders’ equityat beginning of year}(Assets at beginningof year)(Liabilities at beginningof year)= $490,000 $260,000=$230,000

The stockholder's equity for Company H at the beginning of the year is $230,000

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