Question

Here are incomplete financial statements for Donavan, Inc. Calculate the missing amounts.

DONAVAN, INC.
Balance Sheet

Assets

Cash
$ 14,100

Inventory
17,100

Buildings
37,900

Total assets

$69,100

Liabilities and Stockholders' Equity

Liabilities

Accounts payable
$ 5,200

Stockholders' Equity

Common stock
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(a)
Retained earnings
Entry field with correct answer

(b)
Total liabilities and stockholders' equity

$69,100

DONAVAN, INC.
Income Statement

Revenues

$85,800

Cost of goods sold
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(c)
Salaries and wages expense
10,400

Net Income

$
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(d)
DONAVAN, INC.
Retained Earnings Statement

Beginning retained earnings
$19,100

Add: Net income

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(e)
Less: Dividends

4,710

Ending retained earnings
$34,100

Answer 1

Answer and Explanation:

The computation of the missing amounts is shown below:

a. Common stock

= Total Liabilities and Stockholders' Equity - total liabilities - ending retained earnings

= $69,100 - $5,200 - $34,100

= $29,800

b. Retained earnings is $34,100

c. Cost of goods sold

= Revenues - salaries & wages expense - net income

= $85,800 - $10,400 - $19,710

= $55,690

Here net income would be

= Ending retained earnings + dividends - beginning retained earnings

= $34,100 + $4,710 - $19,100

= $19,710

d. Net income is $19,710

e. Net income is $19,710