Question

using the expanded accounting equation, calculate and enter the answers for each question. You will need to use the answers you calculate for beginning and ending equity to answer the rest of the questions. 128000 $18,000 End of Year 28.000 1) What is the equity at the beginning of the year? 2) What is the equity at the end of the year? Beginning Equity 10,000 Ending Equity 32,000 3) If the company issues common stock of $7,400 and pay dividends of $36,700 how much is net income (loss)? 4) If net income is $3,600 and dividends are $5,000, how much is common stock? Net Income (Loss) Common Stock 8,600 S) If the company issues common stock of $17,800 and net income is $16,200, how much is dividends? 6) If the company issues common stock of $42,300 and pay dividends of $3,000, how much is net income (loss)? Dividends 1,600 Net Income (Loss) 39,300

Answer 1

ANSWER:

• In the given question, we have to apply different accounting equations to calculate answer
• Hence, in each question we will use respective equation as per requirement

1. What is the Equity at the beginning of the year?

• Here, As per given details we have to use following accounting formula
• Asset = Liabilities + Equity
• $28000 = $18000 + Equity
• Hence, Equity = $10000

2. What is the equity at the end of the year?

• Here, As per given details we have to use following accounting formula

• Asset = Liabilities + Equity
• $60000 = $28000 + Equity
• Hence, Equity = $32000

3. If the company issues common stock of $7400 and pay dividends of $36700 how much is net income (loss)?

• Here, As per given details we have to use following accounting formula
• Opening Equity + Issued common stock – dividend + Net income = closing Equity
• $10000 + $7400 - $36700 + Net income = $32000
• Net Income = $51300

4. If the net income is $3600 and dividends are $5000 how much is common stock?

• Here, As per given details we have to use following accounting formula

• Opening Equity + Issued common stock – dividend + Net income = closing Equity
• $10000 + Issued common stock – $5000 + $3600 = $32000
• Issued common stock = $23400

5. If the company issues common stock of $17800 and net income is $16200 how much is dividends?

• Here, As per given details we have to use following accounting formula

• Opening Equity + Issued common stock – dividend + Net income = closing Equity
• $10000 + $17800 – dividend + $16200 = $32000
• Dividends = $12000

6. If the company issues common stock of 42300 and pay dividend of $3000, how much is net income (loss)?

• Here, As per given details we have to use following accounting formula
• Opening Equity + Issued common stock – dividend + Net income = closing Equity
• $10000 + $42300 - $3000 + Net income = $32000
• Net Loss = $17300