The following table contains financial information from 5 different companies:

The following table contains financial information from 5 different companies:

	Company A			Company B			Company C			Company D			Company E
December 31, 2010
Assets	$	37,000		$	28,860		$	23,680		$	65,860		$	101,010
Liabilities		30,340			20,202			12,787			45,443			?
December 31, 2011
Assets		40,000			28,800			?			72,800			110,400
Liabilities		?			19,584			13,132			34,944			87,216
During year 2011
Stock issuances		6,000			1,400			9,750			?			6,500
Net income (loss)		8,840			?			1,100			10,439			7,482
Cash dividends		3,500			2,000			5,875			0			11,000
Required:
Answer the following questions about Company A (Omit the "$" sign in your response):

1a.	What is the amount of equity on December 31, 2010?

Amount of equity

$ 6,660

1b.	What is the amount of equity on December 31, 2011?

Amount of equity

$ 18,000

1c.	What is the amount of liabilities on December 31, 2011?

Amount of liabilities

$ 22,000

 

Explanation:

Company A: 

a.	Equity on December 31, 2010:
	Assets	$	37,000
	Liabilities		(30,340	)
	Equity	$	6,660
b.	Equity on December 31, 2011:
	Equity, December 31, 2010	$	6,660
	Plus stock issuances		6,000
	Plus net income		8,840
	Less cash dividends		(3,500	)
	Equity, December 31, 2011	$	18,000
c.	Amount of liabilities on December 31, 2011:
	Assets	$	40,000
	Equity		(18,000	)
	Liabilities	$	22,000
Answer the following questions about Company B (Omit the "$" sign in your response):

2a.	What is the amount of equity on December 31, 2010?

Amount of equity

$ 8,658

2b.	What is the amount of equity on December 31, 2011?

Amount of equity

$ 9,216

2c.	What is net income for year 2011?

Net income

$ 1,158

 

Explanation

Explanation:

Company B:

a. and b.

	12/31/2010				12/31/2011
Equity:
Assets	$	28,860			$	28,800
Liabilities		(20,202	)			(19,584	)
Equity	$	8,658				9,216

c.

Net income for 2011:
Equity, December 31, 2010	$	8,658
Plus stock issuances		1,400
Plus net income		?
Less cash dividends		(2,000	)
Equity, December 31, 2011	$	9,216

  

Therefore, net income must have been   $ 1,158.

3.	Calculate the amount of assets for Company C on December 31, 2011. (Omit the "$" sign in your response)

Amount of Assets

$ 29,000

Explanation:

Company C:

First, calculate the beginning balance of equity:

	Dec. 31, 2010
Assets		$	23,680
Liabilities			(12,787	)
Equity		$	10,893

Next, find the ending balance of equity as follows:

Equity, December 31, 2010	$	10,893
Plus stock issuances		9,750
Plus net income		1,100
Less cash dividends		(5,875	)
Equity, December 31, 2011	$	15,868

Finally, find the ending amount of assets by adding the ending balance of equity to the ending balance of liabilities:

		Dec. 31, 2011
Liabilities			$	13,132
Equity				15,868
Assets			$	29,000
4.	Calculate the amount of stock issuances for Company D during year 2011. (Omit the "$" sign in your response):

Amount of stock issuances

$

Explanation:

Company D:

First, calculate the beginning and ending owner’s equity balances:

	12/31/2010				12/31/2011
Assets	$	65,860			$	72,800
Liabilities		(45,443	)			(34,944	)
Equity	$	20,417				37,856

Then, find the amount of stock issuances during 2011:

Equity, December 31, 2010	$	20,417
Plus stock issuances		?
Plus net income		10,439
Less cash dividends		0
Equity, December 31, 2011	$	37,856

Thus, stock issuances must have been: $ 7,000

5.	Calculate the amount of liabilities for Company E on December 31, 2010. (Omit the "$" sign in your response):

Amount of Liabilities

$

Explanation:

Company E:

First, compute the balance of equity as of December 31, 2011:

 

Assets		$	110,400
Liabilities			(87,216	)
Equity		$	23,184

 

Next, find the beginning balance of equity as follows:

Equity, December 31, 2010	$	?
Plus stock issuances		6,500
Plus net income		7,482
Less cash dividends		(11,000	)
Equity, December 31, 2011	$	23,184

Thus, the beginning balance of equity was $20,202.

Finally, find the beginning amount of liabilities by subtracting the beginning balance of equity from the beginning balance of assets:

	Dec. 31, 2010
Assets		$	101,010
Equity			(20,202	)
Liabilities		$	80,808