ABC Corporation was formed at the beginning of 2020 and presents the following incomplete financial statements for
Question:
ABC Corporation was formed at the beginning of 2020 and presents the following incomplete financial statements for two years. Compute and provide all of the missing values for each year. Begin by solving the unknowns in the 2020 year, and work forward to subsequent years. Remember that 2020 is the first year of business, so ABC begins with a zero balance in 2020 beginning with retained earnings.
2021 | 2020 | |||
Revenues | ||||
Services to customers | $ | $120,000 | ||
Expenses | ||||
Wages | $100,000 | $ | ||
Interest | 4,000 | 4,300 | ||
Net Income | $ | $ |
2021 | 2020 | |
Beginning Retained Earnings | $ | $ |
Net Income | 36,000 | |
Subtotal | $ | $ 30,000 |
Dividends | ||
Ending Retained Earnings | $ | $ |
2021 | 2020 | |||
Assets | ||||
Cash | $ | $ 45,000 | ||
Accounts Receivable | 50,000 | |||
Land | 150,000 | 150,000 | ||
Total Assets | $230,000 | $ | ||
Liabilities | ||||
Interest Payable | $ 1,000 | $ 1,300 | ||
Loan Payable | ||||
Total Liabilities | $ 91,000 | $ | ||
Stockholders’ Equity | ||||
Capital Stock | $ | $140,000 | ||
Retained Earnings | 25,000 | |||
Total Stockholders’ Equity | $ | $150,000 | ||
Total Liabilities and Equity | $ | $250,000 |
Compute the net income for 2020.
$30,000=(30,000-0) | ||
$10,000=(150,000-140,000) | ||
$50,000 – 150,000-100,000 | ||
$20,000=(30,000-10,000) |
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer