Kimmel, Accounting, 6e Help I System Announcements ESOURCES Exercise 1-9 Here ar
ID: 2605918 • Letter: K
Question
Kimmel, Accounting, 6e Help I System Announcements ESOURCES Exercise 1-9 Here are incomplete financial statements for Donavan, Inc. Calculate the missing amounts. pter 1 1-1 3 DONAVAN, INC Balance Sheet Assets 7,000 10,000 45,000 $62,000 Cash Total assets Liabilities and Stockholders' Equity Accounts payable Stockholders' Equity 5,000 ults by Study Common stock Retained earnings Total liabilities and stockholders' equity DONAVAN, INC. $85,000 Cost of goods sold Salaries and wages Net Income DONAVAN, INC Beginning retained Add: Net income Less: Dividends $12,000 5,000Explanation / Answer
Answer
In Retain Earnings Statement, Ending Retained Earnings is $27,000, Dividend = 5,000 Opening Retained earnings is $12,000 so we can find Net income,
Net Income = Closing Retained Earnings + Dividend - Opening Retained Earnings
= 27,000 + 5,000 – 12,000
Net Income = $20,000
In Income Statement, Revenue = 85,000 Salaries and Wages expense is 10,000 and Above we found Net Income, so now we can find Cost of Goods Sold
Cost of Goods Sold = Revenue – Salaries and Wages expense – Net Income
= 85,000 – 10,000 – 20,000
Cost of Goods Sold = $55,000
In Balance Sheet, Total Liabilities and Equity = 62,000, Accounts Payable = 5,000 and Retain Earnings = 27,000 (Already given in question), so now we can find Common Stock
Common Stock = Total Liabilities and Equity - Accounts Payable - Retain Earnings
= 62,000 – 5,000 – 27,000
Common Stock = $30,000
NOW,
a = $30,000
b = $27,000
c = $55,000
d = e = $20,000
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