Computing elements of owners equity


Problem:

You were provided with the following data: D1 = $1.10; P0 = $27.50; g = 6.00%; and F = 5.00%. Computing Elements of Owners' Equity
From the information provided, determine:

1. The amount of retained earnings at December 31.

2. The amount of revenues for the period.

Totals                                                                                   January 1 December 31
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,000    $ 15,000
All other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   190,000     180,000
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    65,000      45,000
Capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   60,000         ?
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      75,000         ?

Additional data:

Expenses for the period were $75,000.
Dividends paid were $11,500.
Capital stock increased by $10,000 during the period.

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Finance Basics: Computing elements of owners equity
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