Question

Assume that new Towne Company reported the following summarized data at September 30, 2016. Accounts appear in no particular order; dollar amounts are in millions.

Stockholders' equity, September 1, 2016* $5 Revenues $37
Accounts Payable 7 Expenses 30
Other assets 21 Cash ?
Other liabilities 6

Stockholders' Equity does not include the current period net income.

Required:
Prepare the trial balance of Towne at September​ 30, 2018. List the accounts in their proper order. How much was Forward Towne. ​Company's net income or net​ loss?

Answer 1

Particulars Amount

Stockholders' equity, $5

September 1, 2016

Add: Revenues $37

Add: Accounts Payable $7

Less: Expenses $(30)

Less: Other assets $(21)

Add: Other liabilities $6

Cash $4

New Towne

Trial balance

For the year ended September 30, 2016

Account title Debit Credit

Cash $4

Other assets $21

Accounts payable $7

Other liabilities $6

Stockholders Equity $5

Revenues $37

Expenses $30

Total $55 $55

Revenues $37

Less: Expenses $(30)

Net income $7