What caused changes in the retained earnings account, and (d) what caused changes in the cash…

Reporting Amounts on the Four Basic Financial Statements

Using the following table and the equations underlying each of the four basic financial statements, show ( a ) that the balance sheet is in balance, ( b ) that net income is properly calculated, ( c ) what caused changes in the retained earnings account, and ( d ) what caused changes in the cash account.

Assets

$79,500

Beginning Retained Earnings

$20,500

Liabilities

18,500

Ending Retained Earnings

28,750

Stockholders’ Equity

61,000

Cash Flows from Operating Activities

15,700

Revenue

32,100

Cash Flows from Investing Activities

(7,200)

Expenses

18,950

Cash Flows from Financing Activities

(5,300)

Net Income

13,150

Beginning Cash

3,200

Dividends

4,900

Ending Cash

6,400

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