ork Chapter 1 Question 1 (of 2) value: 10.00 points Problem 1-1 Incubus Corporat

Question

ork Chapter 1 Question 1 (of 2) value: 10.00 points Problem 1-1 Incubus Corporation began with an investment by shareholders of $35,000. a. In its first year its income showed a deficit of $6,500. What would the equity section of its balance sheet show at year end? (Negative answers should be indicated by a minus sign.) Common stock Retained earnings b. In the second year it had income of $16,500 and a dividend of $5,500 was paid. What would the equity section of its balance sheet show at year end? Common stock Retained earnings c. In the third year, Incubus sold more shares for a value of $17,500, earned income of $11,500, and paid a mart Lab& H....zip 12

Explanation / Answer

Particulars Amount($) Year I a) Common Stock 35000 Retained Earnings -6500 Equity Section 28500 Year II Year II b) Common Stock 35000 Statement of Retained Earings Retained Earnings 4500 Particulars Amount($) 39500 Opening Balance -6500 Add:Current Year Income 16500 Less:Dividends Paid -5500 Closing Retained Earnings 4500

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