Wok N Roll, Inc. shows $300,000 of assets and $60,000 of shareholders\' equity o

Question

Wok N Roll, Inc. shows $300,000 of assets and $60,000 of shareholders' equity on its balance sheet. Liabilities must equal ________. I know the answer is $240,000 but I have no idea how to get it. On July 1, Team Shirts paid $600 for three months' worth of advertising beginning on July 1. What is Advertising expense for the MONTH ended August 31? know the answer is $200, what is the equation Mia Hero, Inc. had a retained earnings balance of $7,000 on December 31, 2011. For the year 2012, sales revenues are $15,000 and expenses are $13,000. If no dividend is declared or paid in 2012, retained earnings at December 31, 2012 equals ________. How do you set this up. I know its $9,000

Explanation / Answer

1] TOTAL ASSETS = TOTAL LIABILITIES + SHAREHOLDERS EQUITY

300000 = 60000 +

TOTAL LIABILITIES = 240000

2]ADVERTISING EXPENSE PER MONTH = 600/3

= 200

THEREFORE , ADVERTISING EXPENSE   FOR AUGUST = $200

3]SALES REVENUE = 15000

LESS:-EXPENSES = 13000

NET PROFIT TRANSFERRED TO RETAINED EARNINGS = 2000

BALANCE IN RETAINED EARNINGS = OPENING BALANCE + NET PROFIT TRANSFERRED TO RETAINED EARNINGS

= 7000 + 2000

=$9000

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