An electric device delivers a current of [tex]$15.0 A$[/tex] for 30 seconds. How many electrons flow through it?
Answer (2)
Calculate total expenses by summing salaries expense, delivery expense, and rent expense.
Determine net income by subtracting total expenses from service revenue: 67 , 700 − 61 , 500 = 6 , 200 .
Calculate ending retained earnings by adding net income to beginning retained earnings: 18 , 200 + 6 , 200 = 24 , 400 .
Verify the accounting equation (Assets = Liabilities + Stockholders' Equity) holds true: 73 , 600 = 5 , 200 + 68 , 400 .
The net income is $6 , 200 .
Explanation
Analyzing the Problem We are given the financial data for Longhorn Corporation and need to prepare the income statement, statement of stockholders' equity, and balance sheet. Let's start by preparing the income statement, which calculates the company's net income by subtracting total expenses from total revenues.
Preparing the Income Statement The income statement includes service revenue, salaries expense, delivery expense, and rent expense. We'll calculate the total expenses and then subtract them from the service revenue to find the net income.
Calculating Net Income Service revenue is given as $67,700. The expenses are:
Salaries expense: $53,400
Delivery expense: $2,600
Rent expense: $5,500
Total expenses are calculated as: 53 , 400 + 2 , 600 + 5 , 500 = 61 , 500 Net income is then: 67 , 700 − 61 , 500 = 6 , 200 So, the net income for Longhorn Corporation is $6,200.
Preparing the Statement of Stockholders' Equity Next, we'll prepare the statement of stockholders' equity. This statement shows the changes in the company's common stock and retained earnings during the year.
Calculating Stockholders' Equity We are given the following information:
Beginning common stock: $40,000
Common stock issued: $4,000
Beginning retained earnings: $18,200
Net income (from the income statement): $6,200
We assume that no dividends were paid during the year. The ending balance of common stock is: 40 , 000 + 4 , 000 = 44 , 000 The ending balance of retained earnings is: 18 , 200 + 6 , 200 = 24 , 400 Total stockholders' equity is the sum of ending common stock and ending retained earnings: 44 , 000 + 24 , 400 = 68 , 400 So, the total stockholders' equity is $68,400.
Preparing the Balance Sheet Finally, we'll prepare the balance sheet. The balance sheet shows the company's assets, liabilities, and stockholders' equity at a specific point in time. The basic accounting equation is:
Assets = Liabilities + Stockholders’ Equity
Verifying the Balance Sheet We are given the following information:
Cash: $1,200
Equipment: $29,000
Buildings: $40,000
Supplies: $3,400
Accounts payable: $4,400
Salaries payable: $800
Total assets are calculated as: 1 , 200 + 29 , 000 + 40 , 000 + 3 , 400 = 73 , 600 Total liabilities are calculated as: 4 , 400 + 800 = 5 , 200 Total stockholders' equity (from the statement of stockholders' equity) is $68,400.
Total liabilities and stockholders' equity is: 5 , 200 + 68 , 400 = 73 , 600 Since total assets equal total liabilities plus total stockholders' equity, the balance sheet is in balance.
Finalizing the Financial Statements In summary, we have prepared the income statement, statement of stockholders' equity, and balance sheet for Longhorn Corporation. The net income is $6,200, the total stockholders' equity is $68,400, total assets are $73,600, and total liabilities are $5,200. The accounting equation (Assets = Liabilities + Stockholders' Equity) holds true, confirming the accuracy of our calculations.
Examples
Understanding financial statements is crucial in the business world. For instance, imagine you're analyzing whether to invest in a company. The income statement shows if the company is profitable, the statement of stockholders' equity tracks changes in ownership, and the balance sheet provides a snapshot of what the company owns and owes. By examining these statements, you can assess the company's financial health and make informed investment decisions. These statements are like a health report for a company, helping investors, creditors, and managers make strategic decisions.
When a device delivers a current of 15.0 A for 30 seconds, a total of approximately 450 coulombs of charge passes through it. This corresponds to approximately 2.81 billion billion electrons. Thus, around 2.81 x 10^21 electrons flow through the device.
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