Question

Use the following information for the year ended December 31, 2022.

Supplies $1,500
Service revenue $19,000
Other operating expenses 10,000
Cash 15,000
Accounts payable 11,000
Dividends 6,000
Accounts receivable 4,000
Notes payable 1,000
Common stock 10,000
Equipment 9,500
Retained earnings (beginning) 5,000

Calculate the following:
a. Net income / (net loss)
b. Ending retained earnings
c. Total assets

Answer 1

To calculate the net income/net loss, subtract total expenses from total revenue. Ending retained earnings are calculated by adding net income to beginning retained earnings. Total assets are found by adding total liabilities and total stockholders' equity.

Step-by-step explanation:

To calculate the net income or net loss, you need to subtract the total expenses from the total revenue. In this case, the total revenue is $19,000 from service revenue. The total expenses are $10,000 from other operating expenses. Net income / (net loss) = Total revenue - Total expenses = $19,000 - $10,000 = $9,000.

To calculate the ending retained earnings, you need to add the net income (or subtract net loss) to the beginning retained earnings. The beginning retained earnings are $5,000. The net income is $9,000. Ending retained earnings = Beginning retained earnings + Net income = $5,000 + $9,000 = $14,000.

To calculate the total assets, you need to add the total liabilities and the total stockholders' equity. The total liabilities are $11,000 from accounts payable and $1,000 from notes payable. The total stockholders' equity is $10,000 from common stock and $14,000 from ending retained earnings. Total assets = Total liabilities + Total stockholders' equity = $11,000 + $1,000 + $10,000 + $14,000 = $36,000.

Answer 2

a. $9,000

b. $8,000

c. $30,000

Step-by-step explanation:

a. Calculation to determine the Net income / (net loss)

Using this formula

Net Income = Revenues - Operating Expenses

Let plug in the morning

Net Income = $19,000 - $10,000

Net Income = $9,000

Therefore the Net income is $9,000

b. Calculation to determine Ending Retained Earnings

Using this formula

Ending Retained Earnings = Retained Earnings at the beginning + Net Income - Dividends paid

Let plug in the morning

Ending Retained Earnings = $5,000 + $9,000 - $6,000

Ending Retained Earnings = $8,000

Therefore Ending Retained Earnings $8,000

c. Calculation to determine the Total Assets

Using this formula

Total Assets = Supplies + Accounts receivables + cash + Equipments

Let plug in the formula

Total Assets = $1,500 + $4,000 + $15,000 + $9,500

Total Assets = $30,000

Therefore Total assets is $30,000