I am in need of help with a accounting class that I am taking online. Please help me in balance sheet?
Question:
Cash..$7,500 A/P..$24,000 Capitol Stock.$42,000 A/R ..$20,000 Building..$49,500 Supplies.$2,0000
Retained Earnings?? Land.$20,000
I. Determine the amount of retained earnings at December 31, 2006...
Please help me to understand how to get the retained earnings...this is my first accounting class online and I really need help..thank you
Answer:
Balance Sheet Formula is Assets = Liability and Equity
Your Assets in the above equation are cash, A/R, building, supplies, and the land. That is everything the Company has.
That amount has to equal what the company either OWES, or Owns. They owe the A/P of 24,000, and have Stock (what they own. The answer I have is $31,200.
Remember the formula Assets (what they HAVE) = Liab (What they OWE) + Equity (What they OWN)
Good luck
The accounting equation is:
Assets minus Liabilities is equal to Equity. Since Retained Earnings is part of the Equity, therefore the solution is:
Cash+A/R+Supplies+Building+Lan... - A/P - Capital Stock = Retained Earnings (33,000)
Hope this helps. But be sure to check first my calculation.
Assets - liabilities = owner's equity
Reatained earnings are part (leftovers) of earnings not paid out in dividends to shareholders - so figure out which are assets and liabilities, and that should equal capitol stock + retained earnings.
More Questions & Answers...