I am in need of help with a accounting class that I am taking online. Please help me in balance sheet?

Question

Balance Sheet Preparation with missing element? The following data are available for Shubert Productions Inc as of December 31, 2006
Cash.....$7,500 A/P.....$24,000 Capitol Stock....$42,000 A/R .....$20,000 Building.....$49,500 Supplies....$2,0000
Retained Earnings?????? Land....$20,000

I. Determine the amount of retained earnings at December 31, 2006...

Please help me to understand how to get the retained earnings...this is my first accounting class online and I really need help..thank you

Answer 1

Balance Sheet Formula is Assets = Liability and Equity
Your Assets in the above equation are cash, A/R, building, supplies, and the land. That is everything the Company has.
That amount has to equal what the company either OWES, or Owns. They owe the A/P of 24,000, and have Stock (what they own. The answer I have is $31,200.
Remember the formula Assets (what they HAVE) = Liab (What they OWE) + Equity (What they OWN)
Good luck

Answer 2

The accounting equation is:

Assets minus Liabilities is equal to Equity. Since Retained Earnings is part of the Equity, therefore the solution is:

Cash+A/R+Supplies+Building+Land - A/P - Capital Stock = Retained Earnings (33,000)

Hope this helps. But be sure to check first my calculation.

Answer 3

Assets - liabilities = owner's equity

Reatained earnings are part (leftovers) of earnings not paid out in dividends to shareholders - so figure out which are assets and liabilities, and that should equal capitol stock + retained earnings.