Relationships between financial statement items. Shareholder made new contributi

Question

Relationships between financial statement items. Shareholder made new contribution of $25.00 to the company during the year.
• Expenses for year ended Dec 31, 2011 = $625
• Net income for year ended Dec 31, 2011= $415
• Beginning balance (Dec 31, 2010, balance) in retained earnings = $215
• Ending balance (Dec 31, 2011, balance) in retained earnings = $500
• Total liabilities and shareholders’ equity at Dec 31,2011 = $875
• Beginning balance (Dec 31, 2010, balance) in total liabilities = $260
• Ending balance (Dec 31, 2011, balance) in total liabilities = $275

1. What was the company’s total revenue during the year ended Dec 31, 2011? 2. What was the amount of dividends declared during the year ended Dec 31, 2011?
3. What is the total that owners had invested in Shane and Lane as of Dec 31, 2011?
4. What were total assets on the company’s Dec 31, 2011 balance sheet?

Explanation / Answer

1. Total Rev - expenses = Net Income So Total Rev = Exp + Net Inc = 625+415 = 1040 2. AMt of Div = O/Bal of Retained earning + Net Inc - C/Bal of Retained earning ie amt of dividend = 215+415-500 = 130 3. Total Equity as on 31 Dec'11 = Total Liability & Equity as on 31 Dec11 - Liability as on 31 Dec'11 = 875-275 = 600 4. Total Assets on 31 Dec'11= Total Liability & Equity as on 31 Dec11 as per Acctg eqn. So Total Assets = 875

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