Acct HW-2 - $ 30,000 Retained Earnings 2,000 Total...

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Emily Leung Accounting 221 January 31 st , 2011 TA: L. Martin (Lab 17) Montana Company Accounting Equation Event Assets = Liabilitie s + Stockhol der’s Equity Acct. Titles for RE Cash Land Notes Payable Common Stock Retained Earnings 1 2,000 30,000 12,000 0 6,000 30,000 8,000 2 (12,000) 12,000 3 10,000 10,000 4 20,000 20,000 Revenue 5 (1,000) (1,000) Expenses 6 (15,000) (15,000) Expenses 7 (2,000) (2,000) Dividend 8 N/A N/A N/A N/A N/A Homework: 1-17; 1-18; 1-23; ATC 1-8 2-2; 2-4; 2-5; 2-7 (1-17A) Montana Company Income Statement Rental Revenue (asset increases) $ 20,000 Operating Expenses (asset decreases) (16,000) Net Income $ 4,000 Montana Company Statement of Changes in Stockholders’ Equity Beginning Common Stock $ 0 Plus: Common Stock Issued 30,000 Ending Common Stock $ 30,000 Beginning Retained Earnings $ 0 Plus: Net Income 4,000 Less: Dividends (2,000) Ending Retained Earnings 2,000
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Total Stockholders’ Equity $ 32,000 Montana Company Balance Sheet Assets Cash $ 30,000 Land 12,000 Total Assets $ 42,000 Liabilities Notes Payable $ 10,000 Stockholders’ Equity Common Stock
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Unformatted text preview: $ 30,000 Retained Earnings 2,000 Total Stockholders’ Equity $ 32,000 Total Liabilities and Stockholders’ Equity $ 42,000 C) Determine the percentage of assets that were provided by retained earnings. How much cash is in the retained earnings account? Assets= Liabilities + Common Stock + Retained Earnings Retained Earnings = Assets – Liabilities – Common Stock Retained Earnings = $42,000 - $10,000 - $30,000 Retained Earnings = $2,000 Percentage of assets provided by retained earnings = Retained earnings/ Total assets Percentage of assets provided by retained earnings = $2,000/ $42,000 = 4.7% Retained earnings provide 4.7% of assets, and $2,000 is in cash. (1-18A) A) The balance in retained earnings account as of January 31 st , 2011 is $0. B) Retained earnings’ is an account. C) At the time expenses are recognized, the retained earnings account is formally recorded in the financial statements....
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Acct HW-2 - $ 30,000 Retained Earnings 2,000 Total...

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