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The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2015: Accounts payable $ 18,000 Accounts receivable 11,000 Accumulated depreciation – equipment 28,000 Advertising expense 21,000 Cash 15,000 Common stock 42,000 Dividends 14,000 Depreciation expense 12,000 Insurance expense 3,000 Note payable, due 6/30/16 70,000 Prepaid insurance (12-month policy) 6,000 Rent expense 17,000 Retained earnings (1/1/15) 60,000 Salaries and wages expense 32,000 Service revenue 133,000 Supplies 4,000 Supplies expense 6,000 Equipment 210,000 What is the amount that would be reported for stockholders’ equity at December 31, 2015?
The following items are taken from the financial statements of the Postal Service for the year ending December 31, 2015: Accounts payable $ 18,000 Accounts receivable 11,000 Accumulated depreciation – equipment 28,000 Advertising expense 21,000 Cash 15,000 Common stock 42,000 Dividends 14,000 Depreciation expense 12,000 Insurance expense 3,000 Note payable, due 6/30/16 70,000 Prepaid insurance (12-month policy) 6,000 Rent expense 17,000 Retained earnings (1/1/15) 60,000 Salaries and wages expense 32,000 Service revenue 133,000 Supplies 4,000 Supplies expense 6,000 Equipment 210,000 What is the amount that would be reported for stockholders’ equity at December 31, 2015?
Answer:Postal ServiceThe amount that would be reported for Stockholders' Equity at December 31, 2015 is:= $130,000.Explanation:a) Trial BalanceDecember 31, 2015:Cash $15,000Accounts receivable 11,000Supplies 4,000Prepaid insurance (12-month) 6,000Equipment 210,000Accounts payable $ 18,000Accumulated depreciation – equipment 28,000Note payable, due 6/30/16 70,000Common stock 42,000Retained earnings (1/1/15) 60,000Dividends 14,000Service revenue 133,000Advertising expense 21,000Depreciation expense 12,000Insurance expense 3,000Rent expense 17,000Salaries and wages expense 32,000Supplies expense 6,000Totals $351,000 $351,000Income Statement for the year ended December 31, 2015Service revenue $133,000Advertising expense 21,000Depreciation expense 12,000Insurance expense 3,000Rent expense 17,000Salaries and wages expense 32,000Supplies expense 6,000 $91,000Net income $42,000Statement of Retained EarningsFor the year ended December 31, 2015Retained earnings (1/1/15) $60,000Net income 42,000Dividends (14,000)Retained earnings (December 31, 2015) $88,000Equity:Common stock $42,000Retained earnings 88,000Total equity $130,000...