Question

As of December 31, Year 1, Moss Company had total cash of $166,000, notes payable of $86,600, and common stock of $53,400. During Year 2, Moss eamed $46,000 of cash revenue, paid $25,000 for cash expenses, and paid a $4.000 cash dividend to the stockholders Required a. Determine the amount of retained earnings as of December 31, Year 1. b. & c. Create an accounting equation and record the beginning account balances, revenue, expense, and dividend events under the appropriate elements of the accounting equation d. Complete the equality of the accounting equation as of December 31, Year 2 Complete this question by entering your answers in the tabs below. Rega Red B and C Reg D Create an accounting equation and record the beginning account balances, revenue, expense, and dividend events under the appropriate elements of the accounting equation. (Enter any decreases to account balances with a minus sign.) MOSS COMPANY Effect of Year 2 Transactions on the Accounting Equation Assets Liabilities Stockholders' Equity Event Notes Retained Comm

Answer 1

December 31Year 1,Retained earnings =$166,000 - $86,600 - $53,400 =$26,000
Event		Assets	=	Liabilities	+	Stockholer's Equity
		Cash	=	Notes Payable	+	Common Stock	+	Retained Earnings
January 1Year 2		$                   1,66,000	=	$                           86,600	+	$           53,400	+	$                 26,000
Cash Revnue		$                      46,000	=		+		+	$                 46,000
Cash Expenses		$                     -25,000	=		+		+	$               -25,000
Cash Dividend Paid		$                     -40,000	=		+		+	$               -40,000
December 31Year 2		$                   1,47,000		$                           86,600		$           53,400		$                   7,000