$2$

As of December $31,$ Year $1,$ Moss Company had total cash of $$195,000,$ notes payable of $$90,500,$ and common stock of $$84,500.$

During Year $2,$ Moss earned $$42,000$ of cash revenue, paid $$24,000$ for cash expenses, and paid a $$3,000$ cash dividend to the stockholders.

$12\mathrm{.}5$

points

Required

a$.$ Determine the amount of retained earnings as of December $31,$ Year $1.$

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b$.$ & c$.$ Create an accounting equation and record the beginning account balances, revenue, expense, and dividend events under the

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appropriate elements of the accounting equation.

d$.$ Complete the equality of the accounting equation as of December $31,$ Year $2.$

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