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Accounting Concepts: compute unknown line items in an income statement

See attached file.

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 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 ...

Solution Summary

Solution gives calculations to find a missing line in an income statement.

$2.19