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FINANCIAL ACCOUNTING - Eighth Edition E 1-21A (10-20 min.

Solutions Manual

Learning Objectives 3, 4: Using the accounting equation; preparing a balance sheet Amounts of the assets and liabilities of Ellen Samuel Banking Company, as of January 31, 2010, are given as follows. Also included are revenue and expense figures for the year ended on that date (amounts in millions): Total revenue ........................ $ 37.8 Receivables........................... 0.9 Current liabilities .................. 151.1 Common stock...................... 14.0 Interest expense 0.8 Salary and other employee expenses. 17.7 Long-term liabilities.. 2.8 Investment assets..................... $ 169.6 Property and equipment, net .. 1.9 Other expenses....................... 6.9 Retained earnings, beginning 8.6 Retained earnings, ending ..... ? Cash......................................... . 2.1 Other assets............................. 14.4

Prepare the balance sheet of Ellen Samuel Banking Company at January 31, 2010. Use the accounting equation to compute ending retained earnings.

Solution: Ellen Samuel Banking Company Balance Sheet (Amounts in millions ) January 31, 2010

Chapter 1: The Financial Statements

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