8. Elston’s equipment on December 31, 2014 is 9. Elston’s retained earnings on D

Question

8. Elston’s equipment on December 31, 2014 is

9. Elston’s retained earnings on December 31, 2014 should be.

10. Elston’s stockholders’ equity on December 31, 2014 should be

Please explain how you got to the answer!

DATA for questions 8, 9, and 10: Elston Company compiled the following financial information as of December 31, 2014 Service revenue Common stock Equipment Operating expenses Cash Dividends Supplies Accounts payable Accounts receivable Retained earnings, 1/1/14 50,000 25,000 100,000 $700,000 150,000 625,000 150,000 75,000 37 5,000

Explanation / Answer

8) Total liabiltiies and stockholder's equity = 550000+100000 = 650000

Total assets = 150000+25000+75000 = 250000

Equipment = 650000-250000 = 400000

9) Net income = 700000-625000 = 75000

Retained earnings on december 31,2014 = (375000+75000-50000) = 400000

10) Stockholder's equity = 150000+400000 = 550000

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