Question

The balance sheet data for Sam’s Office Supplies, Co., at October 31, 2012, and November 30, 2012, follow:


Requirement
1. The following are three independent assumptions about the business during November. For each assumption, compute the amount of net income or net loss during November 2012. Find the solution by preparing the statement of retained earnings. First, use the amounts of total assets, total liabilities, and common stock given previously and the accounting equation to determine the beginning and ending retained earnings amounts. Then plug those and the other amount given in each assumption into the statement of retained earnings to determine the net income or net loss.
a. The business paid no dividends.
b. The business paid $13,000 of dividends.
c. The business paid $19,000 ofdividends.


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  • CreatedApril 29, 2014
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