Question

# The year-end financial statements of Grunewald Company contained the following elements and corresponding amounts. Assets =...

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? and

 Based on this information, the amount of expenses on Grunewald's income statement was?

 Solution: The amount of liabilities reported on the end-of-period balance sheet = \$10,115 Expense = \$8,3330 Working Notes: Assets = Liabilities + Common Stock + Ending Retained Earnings \$21,600 = Liabilities + \$5,000 + \$6,485 Liabilities = \$21,600 - \$5,000 -\$6,485 Liabilities = \$10,115 Beginning retained earnings + Revenue - Expenses - Dividends = Ending retained earnings \$3,995 + \$11,500 - Expenses - \$680 = \$6,485 Expenses = \$3,995 + \$11,500 -\$6,485 - \$680 =8,330 Expenses = \$8,330 Please feel free to ask if anything about above solution in comment section of the question.

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