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    Accounting Equation

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    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.

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    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

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