Question

the amount of the company's assets at the end of the year is: a company started the year with the following: assets $125,000; liabilities $42,500; common stock $72,500; retained earnings $10,000. during the year, the company earned revenue of $6,600, all of which was received in cash, and incurred expenses of $3,800, all of which were unpaid as of the end of the year. in addition, the company paid cash dividends of $2,600 to owners. assume no other activities occurred during the year.

Answer 1

The company's assets at the end of the year are $129,000, calculated by using the accounting equation that incorporates the increases in liabilities due to unpaid expenses, changes in retained earnings from revenue, expenses, and dividends paid, and the initial balances of assets, liabilities, and equity.

Step-by-step explanation:

To determine the amount of the company's assets at the end of the year, we start with the equation for the accounting equation:

Assets = Liabilities + Shareholders' Equity

At the beginning of the year, we have:

Assets: $125,000

Liabilities: $42,500

Common Stock: $72,500

Retained Earnings: $10,000

During the year:

Revenue: $6,600 (increases assets)

Expenses: $3,800 (increases liabilities since they are unpaid)

Dividends Paid: $2,600 (decreases retained earnings)

Calculating the retained earnings at year end:

Beginning Retained Earnings + Revenues - Expenses - Dividends = End Retained Earnings

$10,000 + $6,600 - $3,800 - $2,600 = $10,200

Shareholders' Equity (Common Stock + End Retained Earnings) at year end is:

$72,500 + $10,200 = $82,700

Therefore, the assets at year end would be:

Assets = Liabilities + Shareholders' Equity

Assets = $42,500 (beginning liabilities) + $3,800 (incurred expenses) + $82,700 (ending equity)

Assets = $129,000

So, the amount of the company's assets at the end of the year is $129,000.