Computing Retained Earnings and Net Income The following selected balance sheet amounts are from Aerial Inc. as of December 31, 2020. Selected Balance Sheet Amounts Assets Llabilities Cash $5,600 Accounts payable $ 1,920 Accounts recelvable 2,000 Note payable 4,000 Supplies 1,520 Stockholders' equity Equipment 10,000 Common stock 4,000 Pald-in capital in excess of par 2,000 Required a. Compute retalined earnings as of December 31, 2020, assuming retained earnings is the only missing category in the selected balance sheet amounts above. b. Determine net income assuming that the balance in retained earnings on January 1, 2020, was $1,000; dividends declared during 2020 were $1,800; and no other items affected retained earnings during 2020. S
Computing Retained Earnings and Net Income The following selected balance sheet amounts are from Aerial Inc. as of December 31, 2020. Selected Balance Sheet Amounts Assets Llabilities Cash $5,600 Accounts payable $ 1,920 Accounts recelvable 2,000 Note payable 4,000 Supplies 1,520 Stockholders' equity Equipment 10,000 Common stock 4,000 Pald-in capital in excess of par 2,000 Required a. Compute retalined earnings as of December 31, 2020, assuming retained earnings is the only missing category in the selected balance sheet amounts above. b. Determine net income assuming that the balance in retained earnings on January 1, 2020, was $1,000; dividends declared during 2020 were $1,800; and no other items affected retained earnings during 2020. S
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Computing Retained Earnings and Net Income
The following selected balance sheet amounts are from Aerial Inc. as of December 31, 2020.
Selected Balance Sheet Amounts
Assets
Llabilities
Cash
$5,600
Accounts payable
$ 1,920
Accounts recelvable
2,000
Note payable
4,000
Supplies
1,520 Stockholders' equity
Equipment
10,000
Common stock
4,000
Pald-in capital in excess of par
2,000
Required
a. Compute retained earnings as of December 31, 2020, assuming retained earnings Is the only missing category in the selected balance sheet amounts above.
b. Determine net income assuming that the balance in retained earnings on January 1, 2020, was $1,000; dividends declared during 2020 were $1,800; and no other Items affected retained earnings during 2020. $
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