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As of December 31, 2018, Moss Company had total cash of $195,000, notes payable of $90,500, and common stock of $84,500. During 2019, Moss earned $42,000 of cash revenue, paid $24,000 for cash expenses, and paid $3,000 cash dividend to the stockholders. Record the beginning account balances, revenue, expense, and dividend events under the appropriate elements of the accounting equation.

Respuesta :

Answer:

Explanation:

The beginning account balance is shown below:

Total cash = $195,000

Notes payable =  $90,500

Common stock = $84,200

Since we compare the assets and liabilities amount, they are not equal. SO, the remaining amount should be recorded as a retained earning.

The remaining amount is shown below:

= Total cash - notes payable - common stock  

= $195,000 - $90,500 - $84,200

= $20,000

The accounting equation is shown below:

Total assets = Total liabilities + Owner equity

By using this accounting equation, we can do the recording of each transaction.  

1. Cash revenue is earned

It means cash balance is increased along with the retained earning balance is also increased.

2. Cash expenses are paid

It means cash balance is decreased along with the retained earning balance is also decreased.

3. The cash dividend is paid to the shareholders

It means cash balance is decreased along with the retained earning balance is also decreased.