Fill in the blanks using the Accounting Equation: Assets-Liabilities+Owner'sEquity. Case A B C Case A B Revenues Expenses Net C $30,000 $27,500 A $12,500 E C $23,300 $2,100 Income $3,500 $750 $3,800 $1,250 Assets $18,000 $12,000 D $15,000 In the three situations above, how much was in ending retained earnings for each case if the balances in the Capital Contribution portion of Owner's Equity were as follows: Capital Contribution Retained earnings Liabilities Owner's Equity G H $8,000 F B $3,500 $2,000
Fill in the blanks using the Accounting Equation: Assets-Liabilities+Owner'sEquity. Case A B C Case A B Revenues Expenses Net C $30,000 $27,500 A $12,500 E C $23,300 $2,100 Income $3,500 $750 $3,800 $1,250 Assets $18,000 $12,000 D $15,000 In the three situations above, how much was in ending retained earnings for each case if the balances in the Capital Contribution portion of Owner's Equity were as follows: Capital Contribution Retained earnings Liabilities Owner's Equity G H $8,000 F B $3,500 $2,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:**Accounting Equation Exercise**
**Objective:**
Fill in the blanks using the Accounting Equation: Assets = Liabilities + Owner’s Equity.
### Table 1
| Case | Revenues | Expenses | Net Income | Assets | Liabilities | Owner’s Equity |
|------|----------|-----------|------------|---------|-------------|----------------|
| A | $30,000 | $27,500 | A | $18,000 | $12,000 | B |
| B | $12,500 | C | $3,800 | D | $8,000 | $3,500 |
| C | E | $23,300 | $1,250 | $15,000 | F | $2,000 |
### Table 2
**Question:**
In the three situations above, how much was in ending retained earnings for each case if the balances in the Capital Contribution portion of Owner’s Equity were as follows?
| Case | Capital Contribution | Retained earnings |
|------|----------------------|-------------------|
| A | $2,100 | G |
| B | $3,500 | H |
| C | $750 | I |
### Detailed Explanation:
- **Case A:**
- Revenues = $30,000
- Expenses = $27,500
- Net Income (A) = Revenues - Expenses = $30,000 - $27,500 = $2,500
- Assets = $18,000
- Liabilities = $12,000
- Owner’s Equity (B) = Assets - Liabilities = $18,000 - $12,000 = $6,000
- Capital Contribution = $2,100
- Retained earnings (G) = Owner’s Equity - Capital Contribution = $6,000 - $2,100 = $3,900
- **Case B:**
- Revenues = $12,500
- Net Income = $3,800
- Net Income (C) = Revenues - Expenses
- Expenses (C) = Revenues - Net Income = $12,500 - $3,800 = $8,700
- Liabilities = $8,000
- Owner’s Equity = $3,500
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