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Accounting Equation

Financial statement information about four different companies is as follows.
Karma Molly McCain Bodie
Company Company Company Company
January 1, 2006

Assets $ 89,000 $110,000 (g) $170,000
Liabilities 50,000 (d) 75,000 (f)
Stockholders' equity (a) 60,000 40,000 90,000

December 31, 2006
Assets (b) 147,000 200,000 (k)
Liabilities 55,000 75,000 (h) 80,000
Stockholders' equity 60,000 (e) 130,000 160,000

Stockholders' equity changes in year
Additional investment (c) 15,000 10,000 15,000
Dividends 25,000 (f) 14,000 20,000
Total revenues 350,000 420,000 (i) 520,000
Total expenses 320,000 385,000 342,000 (l)

Instructions
(a) Determine the missing amounts.
(b) Prepare the retained earnings statement for Karma Company. Assume that the beginning balance of retained earnings was zero.

Solution Preview

Please find my response attached in the excel attachment. Please look at the numbers in red. Those are the numbers that were ...

Solution Summary

Uses the basic accounting equation to prepare a retained earning statement.

$2.19