Question

The year-end financial statements of Grunewald Company contained the following elements and corresponding amounts. Assets = $21,600; Common Stock = $5,000; Revenue = $11,500; Dividends = $680; Beginning Retained Earnings = $3,995; Ending Retained Earnings = $6,485.The amount of liabilities reported on the end-of-period balance sheet was? andBased on this information, the amount of expenses on Grunewald's income statement was?

Answer 1

Answer:

The answer of each requirement is given below.

The amount of liabilities reported on the end-of-period balance sheet

To calculate it we will simple accounting basic equation that is given below.

asset = liability + equity

21,600 = liability + (6,485+5000)

Liability = $ 10,115

The amount of expenses on Grunewald's income statement

To calculate it we will first have to determine net profit using retain earning account and than we deduct this net profit from expenses in order to determine revenue.

Detail calculation is given below.

Retain earning opening     ($ 3,995)

Retain earning closing       $ 6,485

Dividend                              $ 680

Net profit                             $ 3,170

Expenses = Revenue - profit

Expenses = 11,500 - 3,170 = $ 8,330