Posted: July 6th, 2016

Calculate the Retained Earnings balance as of December 31, 2010?

1. Joe Company engaged in the following events during 2010:
Began operations by issuing common stock to investors for $40,000 cash
Provided services to customers on account, $95,000
Collected $72,000 cash from accounts receivable
Paid salaries of $55,000 for the year
Adjusted accounts to reflect estimate that 2 percent of services revenues on account would be
uncollectible.

Determine Joe’s
a. net income for 2010 and
B. net cash flow from operating activities
C. balance in accounts receivable at the end of 2010
D. net realizable value of accounts receivable at the end of 2010
E. total assets as of December 31, 2010

* Review exercise-calculate retained earnings
From the following data:

Retained earnings, December 31, 2011 $490,400
Net decrease in total assets during 2011 74,800
Net increase in accounts receivable in 2011 17,200
Dividends declared and paid in 2011 67,200
Proceeds from issuance of bonds during 2011 176,800
Net loss for the year ended December 31, 2011 46,000

Required:Calculate the Retained Earnings balance as of December 31, 2010. (Omit the “$” sign in your response.)