Comments

This is an example of balance sheet results after the accounting system has recorded all of the events.

Each balance sheet must conform to the accounting basic equation,

Assets $=$ Liabilities $+$ Shareholders' Equity

While the figures are jumbled in the problem statement, the balance sheet for each year would be

organized like this:

Common Stock $,$ XXX

Additional Paid in Cap XXX

Total Contributed Cap XXX

Retained Earnings $,xxx$

Total Shareholders $E$ XXX

Total Assets $=$ Total L and SE $=$ XXX $=$ Total Liabilities $+$ Total Shareholders $E$

Balance Sheets are connected from year to year with Retained Earnings. We usually state that the

Balance Sheets "articulate."

Retained Earnings $($beginning of year$)+$ Net Income $-$ Dividends $=$ Retained Earnings $($end of year$)$

For the exam, you should know how the amounts, like Common Stock and Additional Paid in Capital,

add up to the totals. In this case, Common Stock and Additional Paid in Cap add to Total Contributed

Capital

Balance Sheets

Following is selected information from the balance sheet for Flaps Inc.

Required

Solve for the missing amounts for each of the five years.