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As of December 31, 2018, Moss Company had total cash of $147,000, notes payable of $84,700, and common stock of $51,500
As of December 31, 2018, Moss Company had total cash of $147,000, notes payable of $84,700, and common stock of $51,500. During 2019, Moss earned $27,000 of cash revenue, paid $15,500 for cash expenses, and paid a $2,100 cash dividend to the stockholders.
Expert Solution
As you have not provided the question. So, i am calculating the following two questions based on the data provided by you in question:
a- Determine the amount of retained earnings as of December 31, 2014.
b&c - Create an accounting equation and record the beginning account balances, revenue, expense, and dividend events under the appropriate elements of the accounting equation. (Enter any decreases to account balances with a minus sign.)
| a) Computation of Retained Earnings: | |
| Assets (Cash) | $147,000 |
| Less: Common Stock | 51,500 |
| Less: Notes Payable | 84,700 |
| Retained Earnings as of December 31 ,2014 | $10,800 |
| b&c) | |||||||
| Event | Cash | = | Notes Payable | + | Common Stock | + | Retained Earnings |
| Beginning Balance | 147,000 | = | $84,700 | + | 51,500 | + | $10,800 |
| Earned Revenue | 27,000 | = | + | + | 27,000 | ||
| Paid Expenses | -15,500 | = | + | + | -15,500 | ||
| Paid Dividend | -2,100 | = | + | + | -2,100 | ||
| Ending Balance | 156,400 | = | 84,700 | + | 51,500 | + | 20,200 |
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