Fill in the blanks (--) for the following financial statement accounts after Red
ID: 2471104 • Letter: F
Question
Fill in the blanks (--) for the following financial statement accounts after Redlands’ first month of business:
Income Statement
For Month Ended January 31, 2015
Revenues $11
Cost of goods sold __
Gross profit __
Operating expenses 5
Net income $2
Statement of Shareholders’ Equity
For Month Ended January 31, 2015
Beginning contributed capital $ 0
+ Capital invested 20
Ending contributed capital __
Beginning retained earnings $0
Net income __
Dividends paid __
Ending shareholders’ equity __
Balance Sheet
At January 31, 2015
Assets:
Cash __
Accounts receivable 3
Land 15
Total assets __
Liabilities:
Accounts payable $2
Bonds payable 7
Shareholders’ Equity:
Common stock 20
Retained earnings __
Total liabilities and shareholders’ equity $30
Explanation / Answer
Solution:
Gross Profit = Operating Expenses + Net Income = $2 + $5 = $7
Cost of Goods Sold = Revenue – Gross Profit = $11 - $7 = $4
Ending Contributed Capital = Beginning + Capital invested = $0 + $20 = $20
Retained Earnings = Total liabilities and shareholders’ equity – Common Stock – Accounts Payable – Bonds Payable = $30 - $20 - $2 - $7 = $1
Total Assets = Total liabilities and shareholders’ equity
Or Cash + Accounts Receivables + Land = Total Assets = Total liabilities and shareholders’ equity
Cash + $3 + $15 = $30
Cash = $30 - $3 - $15 = $12
Ending Shareholder’s Equity = Retained Earnings as shown in balance sheet = Net Income – Dividend Paid
$1 = $2 – Dividend Paid
Dividend Paid = $2 - $1 = $1
Income Statement
For Month Ended January 31, 2015
Revenues
$11
Cost of goods sold
$4
Gross profit
$7
Operating expenses
$5
Net income
$2
Statement of Shareholders’ Equity
For Month Ended January 31, 2015
Beginning contributed capital
$0
+ Capital invested
$20
Ending contributed capital
$20
Beginning retained earnings
$0
Net income (from profit and loss)
$2
Dividend Paid
$1
Ending shareholders’ equity
$1
Balance Sheet At January 31, 2015
Assets:
Cash
$12
Accounts receivable
$3
Land
$15
Total assets
$30
Liabilities:
Accounts payable
$2
Bonds payable
$7
Shareholders’ Equity:
Common stock
$20
Retained earnings
$1
Total liabilities and shareholders’ equity
$30
I hope, i have clarified all the things with explanation ---- if anything you need, please let me know.. thank you and happy to help you
Income Statement
For Month Ended January 31, 2015
Revenues
$11
Cost of goods sold
$4
Gross profit
$7
Operating expenses
$5
Net income
$2
Statement of Shareholders’ Equity
For Month Ended January 31, 2015
Beginning contributed capital
$0
+ Capital invested
$20
Ending contributed capital
$20
Beginning retained earnings
$0
Net income (from profit and loss)
$2
Dividend Paid
$1
Ending shareholders’ equity
$1
Balance Sheet At January 31, 2015
Assets:
Cash
$12
Accounts receivable
$3
Land
$15
Total assets
$30
Liabilities:
Accounts payable
$2
Bonds payable
$7
Shareholders’ Equity:
Common stock
$20
Retained earnings
$1
Total liabilities and shareholders’ equity
$30
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