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P13-10A (LO5.9) AP Northwood Architects Ltd. is a private company reporting under ASPE. It is authorized to issue an unlimited number of common and $3 cumulative preferred shares. The following is an alphabetical list of its adjusted accounts at March 31, 2024, its fiscal year end. All accounts have normal balances. Accounts payable Accounts receivable Accumulated depreciation-equipment Cash Cash dividends-common Cash dividends-preferred Common shares Consulting revenue Depreciation expense Dividends payable Equipment There are 1,500 preferred and 75,000 common shares issued. Instructions $21.350 Income tax expense $16.535 38,700 Insurance expense 6,550 23.650 Interest expense 3,000 54,600 Notes payable 40,000 Preferred shares 4.500 Prepaid expenses 75.000 Rent expense 404,500 Retained earnings 11,825 Salaries expense 15,000 Salaries payable 224,000 Supplies expense 50,000 56,250 6,150 35.800 64,800 245.400 2,310 25,800 a. Prepare the statement of retained earnings, and the shareholders' equity section of the balance sheet. b. Calculate return on equity. Note: No shares were issued during the year. Taking It Further Why is it important that retained earnings be tracked and presented separately from share capital in the balance sheet?

P13-10A (LO5.9) AP Northwood Architects Ltd. is a private company reporting under ASPE. It is authorized to issue an unlimited number of common and $3 cumulative preferred shares. The following is an alphabetical list of its adjusted accounts at March 31, 2024, its fiscal year end. All accounts have normal balances. Accounts payable Accounts receivable Accumulated depreciation-equipment Cash Cash dividends-common Cash dividends-preferred Common shares Consulting revenue Depreciation expense Dividends payable Equipment There are 1,500 preferred and 75,000 common shares issued. Instructions $21.350 Income tax expense $16.535 38,700 Insurance expense 6,550 23.650 Interest expense 3,000 54,600 Notes payable 40,000 Preferred shares 4.500 Prepaid expenses 75.000 Rent expense 404,500 Retained earnings 11,825 Salaries expense 15,000 Salaries payable 224,000 Supplies expense 50,000 56,250 6,150 35.800 64,800 245.400 2,310 25,800 a. Prepare the statement of retained earnings, and the shareholders' equity section of the balance sheet. b. Calculate return on equity. Note: No shares were issued during the year. Taking It Further Why is it important that retained earnings be tracked and presented separately from share capital in the balance sheet?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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P13.10A (LO5.9) AP Northwood Architects Ltd. is a private company reporting under ASPE. It is authorized to issue an unlimited number of common and $3 cumulative preferred shares. The following is an alphabetical list of its adjusted accounts at March 31, 2024, its fiscal year end. All accounts have normal balances. Accounts payable Accounts receivable Accumulated depreciation equipment 23,650 Interest expense 54,600 Notes payable 40,000 Preferred shares 4.500 Prepaid expenses 75.000 Rent expense 404,500 Retained earnings Cash Cash dividends-common Cash dividends-preferred Common shares $21,350 Income tax expense $ 16,535 38,700 Insurance expense 6,550 3,000 50,000 56,250 6,150 35,800 64,800 245,400 Consulting revenue Depreciation expense Dividends payable Equipment 11,825 Salaries expense 15,000 Salaries payable 224,000 Supplies expense 2,310 25,800 There are 1,500 preferred and 75,000 common shares issued. Instructions a. Prepare the statement of retained earnings, and the shareholders' equity section of the balance sheet. b. Calculate return on equity. Note: No shares were issued during the year. Taking It Further Why is it important that retained earnings be tracked and presented separately from share capital in the balance sheet? Calculate return on assets and equity, and comment.
Transcribed Image Text:P13.10A (LO5.9) AP Northwood Architects Ltd. is a private company reporting under ASPE. It is authorized to issue an unlimited number of common and $3 cumulative preferred shares. The following is an alphabetical list of its adjusted accounts at March 31, 2024, its fiscal year end. All accounts have normal balances. Accounts payable Accounts receivable Accumulated depreciation equipment 23,650 Interest expense 54,600 Notes payable 40,000 Preferred shares 4.500 Prepaid expenses 75.000 Rent expense 404,500 Retained earnings Cash Cash dividends-common Cash dividends-preferred Common shares $21,350 Income tax expense $ 16,535 38,700 Insurance expense 6,550 3,000 50,000 56,250 6,150 35,800 64,800 245,400 Consulting revenue Depreciation expense Dividends payable Equipment 11,825 Salaries expense 15,000 Salaries payable 224,000 Supplies expense 2,310 25,800 There are 1,500 preferred and 75,000 common shares issued. Instructions a. Prepare the statement of retained earnings, and the shareholders' equity section of the balance sheet. b. Calculate return on equity. Note: No shares were issued during the year. Taking It Further Why is it important that retained earnings be tracked and presented separately from share capital in the balance sheet? Calculate return on assets and equity, and comment.
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