The following accounts and balances were drawn from the records of Hoover Compan

Question

The following accounts and balances were drawn from the records of Hoover Company on December 31, 2013:

Cash $4,800   Accounts Receivable $1,800

Dividends 2,400 Common Stock 2,875

Land 2,700 Revenue 2,700

Accounts Payable 1,400 Expense 1,500

Total assets on the December 31, 2013 balance sheet would amount to:

$9,300.

$11,700.

$12,000.

$7,500.

The amount of net income shown on the December 31, 2013 income statement would amount to:

$2,700.

$1,500.

$1,200.

$1,000.

The amount of retained earnings as of January 1, 2014 was:

$7,500.

$5,025.

$3,825.

$6,225.

Explanation / Answer

1) Total assets as on December 31, 2013 Cash 4800 Accounts receivable 1800 Land 2700 9300 Hence 1s option is correct 2) Revenue 2700 Less Expenses 1500 Net Income 1200 Hence 3rd option is correct 3) The amount of retained earnings as of January 1 , 2014 Total assets - Common stock - Aaccounts payable = 9300 - 2875 - 1400 = 5025 Hence 2bd option is correct

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