Question

The following financial statement information is from five separate companies.

Company Company Company Company Company

A B C D E

December 31, 2016

Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . \(55,000 \)34,000 \(24,000 \)60,000 $119,000

Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 24,500 21,500 9,000 40,000 ?

December 31, 2017

Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,000 40,000 ? 85,000 113,000

Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . ? 26,500 29,000 24,000 70,000

During year 2017

Stock issuances . . . . . . . . . . . . . . . . . . . . 6,000 1,400 9,750 ? 6,500

Net income (loss) . . . . . . . . . . . . . . . . . . . 8,500 ? 8,000 14,000 20,000

Cash dividends . . . . . . . . . . . . . . . . . . . . . 3,500 2,000 5,875 0 11,000

Required

3. Compute the amount of assets for Company C on December 31, 2017.

Short answer

The equity for 2016 is $15,000, and assets for 2017 are $55,875

Step-by-step solution

Step-by-Step SolutionStep 1 Calculation of equity for 2016

$$\begin{gathered} \mathbf{Equity}\mathbf{=}\mathbf{Assets}\mathbf{-}\mathbf{Liabilities} \\ \mathbf{=}\mathbf{24}\mathbf{,}\mathbf{000}\mathbf{-}\mathbf{9}\mathbf{,}\mathbf{000} \\ \mathbf{=}\mathbf{\$}\mathbf{15}\mathbf{,}\mathbf{000} \end{gathered}$$

Calculation of equity for 2017

$$\begin{gathered} \mathbf{Assets}\mathbf{=}\mathbf{Liabilities}\mathbf{+}\mathbf{EquityOld}\mathbf{+}\mathbf{Newissue}\mathbf{+}\mathbf{Netincome}\mathbf{-}\mathbf{Dividends} \\ \mathbf{=}\mathbf{29}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{15}\mathbf{,}\mathbf{000}\mathbf{+}\mathbf{9}\mathbf{,}\mathbf{750}\mathbf{+}\mathbf{8}\mathbf{,}\mathbf{000}\mathbf{-}\mathbf{5}\mathbf{,}\mathbf{875} \\ \mathbf{=}\mathbf{\$}\mathbf{55}\mathbf{,}\mathbf{875} \end{gathered}$$