1. The information presented here represents selected data from the December 31,
ID: 2349238 • Letter: 1
Question
1. The information presented here represents selected data from the December 31, 2010, balance sheets and income statements for the year then ended for three firms.Calculate the missing amounts for each firm.
Firm A Firm B Firm C
Total assets, 12/31/10 $ 406,000 $ 534,000 $ 332,000
Total liabilities, 12/31/10 213,000 145,000
Paid-in capital, 12/31/10 82,000 43,000
Retained earnings, 12/31/10 302,000
Net income for 2010 87,000 110,000
Dividends declared and paid during 2010 44,000 14,000 60,000
Retained earnings, 1/1/10 83,000 42,000
Explanation / Answer
. . . . . . . . . . . . . . . . . . . . . . . Firm A . . .Firm B . . .Firm C Total assets, 12/31/10..................A , , , ,$435,000 , ,$155,000 Total Liabilities, 12/31/10.........$80,000 . . . . B . . . . . . 75,000 Paid-in-Capital, 12/31/10.........$55,000 . . . .59,000 . . . 45,000 Retained Earnings, 12/31/10....... .C . . . . .186,000 . . . . . D Net income for 2010................68,000 . . . 110,000 . . . 25,500 Dividends declared and pd.......12,000 . . . . . E . . . . . . 16,500 Retained earnings, 1/1/10........50,000 . . . 124,000 . . . . . .F C R/E 1/1/10 + Net Income + Dividends = R/E 12/31/10 (C) 50,000 + 68,000 - 12,000 = (C)106,000 A Assets (A) = Liabilities + Equity (A) 241,000 = 80,000 + (55,000 + 106,000) E R/E 1/1/10 + Net Income + Dividends (E) = R/E 12/31/10 124,000 + 110,000 - (E) 48,000 = 186,000 B Assets = Liabilities (B) + Equity 435,000 = (B) 190,000 + (59,000 + 186,000) D Assets = Liabilities + Equity (Paid-in Capital + R/E (D)) 155,000 = 75,000 + (45,000 + (D) 35,000) F R/E 1/1/10 + Net Income + Dividends = R/E 12/31/10 (F) 26,000 + 25,500 - 16,500 = 35,000
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