Question

6. Information for Beethoven Music Company is given below. Use the expansion of the basic accounting equation to solve for the missing amounts. Assume no change in the Stock account during the year. Total assets at the beginning of the year $145,200 Equity at the end of the year 104,100 Total assets at the end of the year (a) Dividends paid during the year Total liabilities at the beginning of the year 92,600 Net income for the year 77,500 Total liabilities at the end of the year 126,900 Revenues 554,800 Equity at the beginning of the year (b) Expenses

Answer 1

(a)

Ending assets = Ending liabilities + Ending equity

= 126,900 + 104,100

= $231,000

(b)

Beginning assets = Beginning liabilities + Beginning equity

145,200 = 92,600 + Beginning equity

Beginning equity = $52,600

(d)

Net income = Revenues - Expenses

77,500 = 554,800 - Expenses

Expenses = $477,300

(c)

Ending equity = Beginning equity + Net income - Dividends

104,100 = 52,600 + 77,500 - Dividends

Dividends = $26,000

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