| Prepare the retained earnings portion of a controversy of changes in owners equity for the year finish December 31, 2010:|
| |
| well-kept Earnings, December 31, 2009………………………………… $ 311,800|
| Less: Net loss for the year ended December 31, 2010………………….. (4,700)|
| Less: Dividends declared and paid in 2010…..…………………………. (18,500)|
| hold Earnings, December 31, 2010………………………………… $288,600|
E2.7. | |
| OE .|
| A = L + PIC + RE|
| scratch: $12,400 = $7,000 + $ 0 + $5,400|
| Changes: ? = -1,200 + 0 + 3,000 ( realize income)|
| ? (dividends) |
| Ending: ?
= ? + 0 + $6,000|
| |
| Solution come up: |
| (Remember that plunder assets = Assets - Liabilities = Owners equity = PIC + RE ).Since paid-in capital did non change during the year, assume that the etymon and result balances are $0. Thus, beginning retained earnings = $12,400 - $7,000 = $5,400, and ending retained earnings = net assets at the end of the year = $6,000. By looking at the RE column, it can be seen that dividends must have been $2,400. in any case by looking at the liabilities column, it can be seen that ending liabilities are $5,800, and therefore ending assets must be $11,800. Thus, heart and soul assets decrementd by $600 during the year ($12,400 -$11,800), which is equal to the net decrease on the right-hand side of the balance sheet (-$1,200 liabilities + $3,000 net income -$2,400 dividends = $600 net decrease in assets).|
E3.5. | |
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