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28 January, 10:18

As of December 31, 2018, Moss Company had total cash of $160,000, notes payable of $86,000, and common stock of $52,800. During 2019, Moss earned $40,000 of cash revenue, paid $22,000 for cash expenses, and paid a $3,400 cash dividend to the stockholders. Required a. Determine the amount of retained earnings as of December 31, 2018. b

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  1. 28 January, 13:40
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    Given:

    Total cash = $160,000

    Notes payable = $86,000

    Common stock = $52,800

    Find:

    Retained earnings as on December 31, 2018

    Computation for retained earning:

    According to Accounting Equation:

    Assets = Liabilities + Stock holder equity

    Total Cash = Notes payable + Common stock + Retained earning

    $160,000 = $86,000 + $52,800 + Retained earning

    $160,000 = $138,800 + Retained earning

    Retained earning = $160,000 - $138,800

    Retained earning = $21,200
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