Accounting Concepts: compute unknown line items in an income statement
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For each of the following independent cases, compute the amounts (in thousands) for the items indicated by
letters, and show your supporting computations:
CASE
1 2 3
Revenues $150 $ K $300
Expenses 120 170 270
Dividends Declared 0 5 Q
Additional Investment by stockholders 0 30 35
Net income E 20 P
Retained earnings Beginning of year 40 50 100
Retained earnings End of year D J 110
Paid-in capital Beginning of year 15 10 N
Paid-in capital End of year C H 85
Total assests Beginning of year 85 F L
Total assests End of year 95 275 M
Total liabilities Beginning of year A 100 105
Total liabilities End of year B G 95
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Solution Summary
Solution gives calculations to find a missing line in an income statement.
Solution Preview
In case 1, we should first calculate E
E: net income = revenues - expenses = 30
D: Retained earning End of Year = Retained earning Beginning of Year + net income - dividends declared
= 40 + 30 - 0
= 70
C: Paid-in capital End of Year = Paid-in capital Beginning of Year + Additional Investment by stockholders
= 15 + 0
= 15
A: Total liabilities Beginning of year = Total assets ...
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