Use financial statement relationships to determine missing amounts. (LO 3) E1-12
ID: 2330153 • Letter: U
Question
Use financial statement relationships to determine missing amounts.
(LO 3)
E1-12BThe summaries of data from the balance sheet, income statement, and retained earnings statement for two corporations, Yeagen Corporation and Williams’ Enterprises, are presented below for 2014.
Yeagen
Williams’
Corporation
Enterprises
Beginning of year
Total assets
$140,000
$230,000
Total liabilities
24,000
(d)
Total stockholders’ equity
(a)
100,000
End of year
Total assets
(b)
280,000
Total liabilities
24,000
140,000
Total stockholders’ equity
136,000
(e)
Changes during year in retained earnings
Dividends
(c)
10,000
Total revenues
300,000
(f)
Total expenses
200,000
100,000
Instructions
Determine the missing amounts. Assume all changes in stockholders’ equity are due to changes in retained earnings.
Use financial statement relationships to determine missing amounts.
(LO 3)
Explanation / Answer
Answer:
For Yeagen Corporation:
Beginning Stockholders Equity = Beginning Assets - Beginning Liabilities
Beginning Stockholders’ Equity = $140,000 - $24,000
Beginning Stockholders’ Equity = $116,000
Ending Assets = Ending Stockholders’ Equity + Ending Liabilities
Ending Assets = $136,000 + $24,000
Ending Assets = $160,000
Change in Stockholders’ Equity = Ending Stockholders’ Equity - Beginning Stockholders Equity
Change in Stockholders’ Equity = $136,000 - $116,000
Change in Stockholders’ Equity = $20,000
Change in Stockholders’ Equity = Revenues - Expenses – Dividends
$20,000 = $300,000 - $200,000 – Dividends
$20,000 = $100,000 – Dividends
Dividends = $100,000 - $20,000
Dividends = $80,000
For Williams’ Enterprises:
Beginning Total Liabilities = Beginning Total Assets – Beginning Total Stockholders’ Equity
Beginning Total Liabilities = $230,000 - $100,000
Beginning Total Liabilities = $130,000
Ending Stockholders Equity = Ending Total Assets – Ending Total Liabilities
Ending Stockholders’ Equity = $280,000 - $140,000
Ending Stockholders Equity = $140,000
Change in Stockholders’ Equity = Ending Stockholders’ Equity - Beginning Stockholders Equity
Change in Stockholders Equity = $140,000 - $100,000
Change in Stockholders Equity = $40,000
Change in Stockholders’ Equity = Revenues - Expenses – Dividends
$40,000 = Revenues - $100,000 - $10,000
Revenues = $100,000 + $10,000 - $40,000
Revenues = $70,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.