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At December 31, 2010, the accounting records of Hercules Manufacturing, Inc
At December 31, 2010, the accounting records of Hercules Manufacturing, Inc. contain the following items: Accounts $12,000 Accounts $30,000 payable receivable Land $90,000 Cash $7,000 Building $250,000 Equipment ? Notes $135,000 Capital stock 188,000 Payable Retained earnings Question 1. If total assets of Hercules Manufacturing, Inc. are $556,000, Calculate the value of Equipment in the balance sheet. Question 2. If total assets of Hercules Manufacturing, Inc. are $556,000, Calculate the value of retained earnings in the balance sheet.
Expert Solution
1) Total Assets = Land + Building + Accounts receivable + Cash + Equipment
$ 556,000 = $ 90,000 + $ 250,000 + $ 30,000 + $ 7,000 + Equipment
$ 556,000 = $ 377,000 + Equipment
Equipment = $ 556,000 - $ 377,000 = $ 179,000
2) Total Assets = Liabilities + Owner's equity
$ 556,000 = [ Accounts Payable + Note Payable] + [ Capital Stock + Retained Earnings ]
$ 556,000 = [ $ 12,000 + $ 135,000 ] + [ $ 188,000 + Retained earnings ]
$ 556,000 = $ 147,000 + $ 188,000 + Retained earnings
Retained Earnings = $ 556,000 - $ 335,000
Retained earnings = $ 221,000
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