E1-1 Reporting Amounts on the Four Basic Financial Statements [LO2]
Using the following table and the equations underlying each of the four basic financial statements, show (a) that the balance sheet is in balance, (b) that net income is properly calculated, (c) what caused changes in the retained earnings account, and (d) what caused changes in the cash account. (Negative amounts should be indicated by a minus sign. Omit the “$” sign in your response.)
Assets $ 19,260
Liabilities 14,540
Stockholders’ Equity 4,720
Revenue 10,530
Expenses 9,280
Net income 1,250
Dividends 680
Beginning Retained Earnings 3,620
Ending Retained Earnings 4,190
Cash Flows from Operating Activities 1,670
Cash Flows from Investing Activities (1,460 )
Cash Flows from Financing Activities (870 )
Beginning Cash 1,170
Ending Cash 510
Required:
a. Assets = +
= $ + $
Assets reported = $
b. Net income = –
= $ – $
Net income reported = $

c. Ending Retained Earnings = + –
= $ + $ – $
= $

d. Ending Cash = + + +
= $ + $ + $ + $
= $