Financial information related to Midas Interiors for March andApril 2008 is as f
ID: 2457514 • Letter: F
Question
Financial information related to Midas Interiors for March andApril 2008 is as follows:
March31,2008 April 30, 2008
Accountspayable $ 30,800 $ 33,200
Accountsreceivable 68,000 78,250
Capitalstock 37,500 37,500
Retainedearnings ? ?
Cash 120,000 204,000
Supplies 6,000 5,000
Explanation / Answer
Balance sheet March 31,2008 Current Assets Cash 120,000 A/R 68,000 Supplies 6,000 Total Current Assets 194,000 Current Liabilities A/P 30,800 Total current liabilities 30,800 Shareholders equity Capital stock 37,500 Retained earnings 125,700 Total liabilities& shareholders equity 194,000 Explanation for Mar 08 A = L + O 194,000 = 30,800 + 37,500 + N.I 194,000-30,800-37,500 =N.I Net Income=125,700 Since no dividends are paid, that Net income itself is the retainedearnings. Balance sheet Apr 30,2008 Current Assets Cash 204,000 A/R 78,250 Supplies 5,000 Total Current Assets 287,250 Current Liabilities A/P 33,200 Total current liabilities 33,200 Shareholders equity Capital stock 37,500 Retained earnings 216,550 Total liabilities& shareholders equity 287,250 Explanation for Apr 08 , A = L+ O 287,250 = 33,200 +37,500 + Beg.retained earnings -Dividends 287,250 -33,200-37,500-125,700+25,000 Net Income=115,850
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