Several amounts from Kamogelo Company at December 31, 2020, are listed below. Service revenue R245,000 Salaries expense R109,000 Dividends declared and paid 15,000 Rent expense 36,000 Buildings 110,000 Land 100,000 Accounts payable 40,000 Accounts receivable 40,000 Capital stock 60,000 Retained earnings, Jan. 1, 2020 40,000 Utilities expense 19,000 Notes payable 30,000 Income tax payable 4,000 Income tax expense 11,000 Required: Answer the following questions: 1. Calculate net income for 2020. 2. How much is Kamogelo Company’s retained earnings at the end of 2020? 3. What primary asset account is missing?
Several amounts from Kamogelo Company at December 31, 2020, are listed below. Service revenue R245,000 Salaries expense R109,000 Dividends declared and paid 15,000 Rent expense 36,000 Buildings 110,000 Land 100,000 Accounts payable 40,000 Accounts receivable 40,000 Capital stock 60,000 Retained earnings, Jan. 1, 2020 40,000 Utilities expense 19,000 Notes payable 30,000 Income tax payable 4,000 Income tax expense 11,000 Required: Answer the following questions: 1. Calculate net income for 2020. 2. How much is Kamogelo Company’s retained earnings at the end of 2020? 3. What primary asset account is missing?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Several amounts from Kamogelo Company at December 31, 2020, are listed below.
| Service revenue | R245,000 | Salaries expense | R109,000 |
| Dividends declared and paid | 15,000 | Rent expense | 36,000 |
| Buildings | 110,000 | Land | 100,000 |
| Accounts payable | 40,000 | 40,000 | |
| Capital stock | 60,000 | 2020 |
40,000 |
| Utilities expense | 19,000 | Notes payable | 30,000 |
| Income tax payable | 4,000 | Income tax expense | 11,000 |
Required:
Answer the following questions:
1. Calculate net income for 2020.
2. How much is Kamogelo Company’s retained earnings at the end of 2020?
3. What primary asset account is missing?
Expert Solution
Introduction:
Net income of the business can be calculated by deducting all the expenses from the total income of the business. Retained earnings means total earnings attributable to the owners. Net income increases retained earnings and any drawings made will decrease the retained earnings.
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