Question

Missing Amounts from Balance Sheet and Income Statement Data:

One item is omitted in each of the following summaries of balance sheet and income statement data for the following four different corporations:
Freeman Heyward Jones Ramirez
Beginning of the year:
Assets $900,000 $490,000 $115,000 ?
Liabilities 360,000 260,000 81,000 $120,000
End of the year:
Assets 1,260,000 675,000 100,000 270,000
Liabilities 330,000 220,000 80,000 136,000
During the year:
Additional common-
stock issued ? 150,000 10,000 55,000
Dividends 75,000 ? 16,500 39,000
Revenue 570,000 235,000 ? 115,000
Expenses 240,000 128,000 122,500 128,000

Determine the missing amounts. Hint: First determine the amount of increase or decrease in stockholders' equity during the year.

Answer 1

Owner’s Equity (beginning) + Investments – Withdrawals + Revenues – Expenses = Owner’s Equity (ending).

Step-by-step explanation:

In each case, we will solve for a single unknown, using the following equation:

Owner’s Equity (beginning) + Investments – Withdrawals + Revenues – Expenses = Owner’s Equity (ending).

The missing amounts are calculated and imaged is attached.

Answer 2

Ramirez beginning Assets: 81,000

Freeman Additional common stock: 135,000

Heyward dividends 32,000

Jones Revenue 115,000

Step-by-step explanation:

In all cases we first solve for how much the equity changed duriing the period

Assets = Liabilities + Equity

ΔAssets = ΔLiabilities + ΔEquity

Last the equity increase is explained by the formula:

ΔEquity = stock issued - dividends + revenues - expenses

Ramirez beginning Assets:

ΔAssets = ΔLiabilities + ΔEquity

ΔAssets = 16,000 + 55,000 - 39,000 + 115,000 - 128,000

ΔAssets = 19,000

Ending Assets 100,000

Less change during the year of 19,000

Beginning assets = 81,000

Freeman Additional common stock:

ΔAssets = ΔLiabilities + ΔEquity

360,000 = -30,000 + ΔEquity

ΔEquity = 390,000

390,000 = stock issued - 75,000 + 570,000 - 240,000

stock issued = 135,000

Heyward dividends

ΔAssets = ΔLiabilities + ΔEquity

185,000 = -40,000 + ΔEquity

ΔEquity = 225,000

225,000 = 150,000 - dividends + 235,000 - 128,000

dividends = 32,000

Jones Revenue

ΔAssets = ΔLiabilities + ΔEquity

-15,000 = -1,000 + ΔEquity

ΔEquity = -14,000 (in this case equity decreased)

-14,000 = 10,000 - 16,500 + revenue - 122,500

revenue = 115,000