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The below table represents the balances for three independent companies, you have to determine the value for each of the missing amounts
The below table represents the balances for three independent companies, you have to determine the value for each of the missing amounts. Company "A" Company "B" Company "C" Balances as on January 15, 2019 160000 Assets $140,000.00 $210,000.00 110000 $100,000.00 Liabilities $60,000.00 $100,000.00 $60,000.00 80000 Equity Balances as on December 31, 2019 Assets $190,000.00 110000 $250,000.00 $160,000.00 $190,000.00 60000 Liabilities 90000 $130,000.00 Equity $80,000.00 2019 Additional Financial Information $20,000.00 $13,000.00 Additional investment $20,000.00 Dividends $12,000.00 $550,000.00 $750,000.00 Total revenues $800,000.00 $450,000.00 $570,000.00 Total expenses
Expert Solution
| First of all it is assumed that additional investment meaning is additional investment in equity. | |||
| Additional investment in company "A" is calculated as under: | |||
| $ | $ | ||
| Ending Equity as on December 31, 2019 | 80,000 | ||
| Revenue | 5,50,000 | ||
| Expenses | -5,70,000 | ||
| Add: Net Loss | 20,000 | ||
| Add: Dividends | 12,000 | ||
| Beginning Equity as on January 1, 2019 | -80,000 | ||
| Additonal investment | 32,000 | ||
| Dividend in company "B" is calculated as under: | |||
| $ | $ | ||
| Ending Equity as on December 31, 2019 | 90,000 | ||
| Revenue | 7,50,000 | ||
| Expenses | -8,00,000 | ||
| Add: Net Loss | 50,000 | ||
| Less: Additional investment | -20,000 | ||
| Beginning Equity as on January 1, 2019 | -1,00,000 | ||
| Dividend | 20,000 | ||
| It means reversal of dividend -20,000 | |||
| Revenue in company "C" is calculated as under: | |||
| $ | $ | ||
| Ending Equity as on December 31, 2019 | 1,30,000 | ||
| Less: Additional investment | -13,000 | ||
| Beginning Equity as on January 1, 2019 | -60,000 | ||
| Add: Dividends | 20,000 | ||
| Net profit | 77,000 | ||
| Net profit = Revenue - Expenses | |||
| 77000 = Revenue -450000 | |||
| Revenue = 450000 + 77000 = $ 5,27,000 | |||
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