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    how do you calculate revenue?

    Asked Aug 26, 2007, 08:46 PM — 6 Answers
    hello, I was wandering if someone could help me figure out how much revenue this company made for the year.

    the only thing given is:
    Beginning of Year assets - 125,000
    beginning of year liabilities - 65,000

    end of year assets - 175,000
    end of year liabilities - 55,000

    additional issue of capital stock - 25,000
    dividends - 8,000
    revenue - ?
    expenses - 32,000

    thank you so much
    I know net income - expenses = revenue
    ? - 32,000 = ?

    Last edited by charity0216; Aug 26, 2007 at 09:00 PM.
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    charity0216's Avatar
    charity0216 Posts: 2, Reputation: 1
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    #2

    Aug 26, 2007, 09:14 PM
    Quote Originally Posted by charity0216
    hello, i was wandering if someone could help me figure out how much revenue this company made for the year.

    the only thing given is:
    Beginning of Year assets - 125,000
    beginning of year liabilities - 65,000

    end of year assets - 175,000
    end of year liabilities - 55,000

    additional issue of capital stock - 25,000
    dividends - 8,000
    revenue - ?
    expenses - 32,000

    thank you so much
    i know net income - expenses = revenue
    ? - 32,000 = ?
    okay I think I might have it
    assets - liabilities - capital stock = retained earnings
    125,000 - 65,000 - 25,000 = 35,000

    then
    net income - retained earnings = dividends
    60,000 - 35,000 = 25,000

    revenue - expenses = net income
    32,000 = 60,000

    so 60,000 + 32,000 = 92,000

    so the revenue would be 92,000?
    right?
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    CaptainForest's Avatar
    CaptainForest Posts: 3,646, Reputation: 392
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    #3

    Aug 26, 2007, 11:29 PM
    BALANCE SHEET BEG OF YEAR:
    Beginning of Year assets - 125,000
    beginning of year liabilities - 65,000
    BEG Owner’s EQUITY = 125,000 – 65,000 = 60,000

    BALANCE SHEET END OF YEAR:
    end of year assets - 175,000
    end of year liabilities - 55,000
    END OWNER”S EQUITY = 175,000 – 55,000 = 122,000

    Therefore, we know that Owner’s Equity increase by 62,000 during the year (122,000 now compared to 60,000 at the beginning of the year)

    We also know that..
    additional issue of capital stock - 25,000
    dividends - 8,000

    Therefore, of the rise of 62,000, 25,000 is do to capital stock, plus there was a decrease of 8,000 for dividends.

    Therefore, we know that the Net Income was 62,000 – 25,000 + 8,000 = 45,000

    With a Net Income of 45,000, Plus the expenses given at 32,000, we know that the revenues must be 77,000
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    Indira312's Avatar
    Indira312 Posts: 2, Reputation: 1
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    #4

    May 16, 2012, 02:53 AM
    Charity0216, why your didvidends are equal to 25,000? Is it because of the capital stock and dividends are the same thing here?
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    Indira312's Avatar
    Indira312 Posts: 2, Reputation: 1
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    #5

    May 16, 2012, 02:55 AM
    Quote Originally Posted by CaptainForest View Post
    BALANCE SHEET BEG OF YEAR:
    Beginning of Year assets - 125,000
    Beginning of year liabilities - 65,000
    BEG Owner’s EQUITY = 125,000 – 65,000 = 60,000

    BALANCE SHEET END OF YEAR:
    End of year assets - 175,000
    End of year liabilities - 55,000
    END OWNER”S EQUITY = 175,000 – 55,000 = 122,000

    Therefore, we know that Owner’s Equity increase by 62,000 during the year (122,000 now compared to 60,000 at the beginning of the year)

    We also know that..
    Additional issue of capital stock - 25,000
    Dividends - 8,000

    Therefore, of the rise of 62,000, 25,000 is do to capital stock, plus there was a decrease of 8,000 for dividends.

    Therefore, we know that the Net Income was 62,000 – 25,000 + 8,000 = 45,000

    With a Net Income of 45,000, Plus the expenses given at 32,000, we know that the revenues must be 77,000
    Why the dividend amount (8,000) is added if you say, there's a decrease?
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    pready's Avatar
    pready Posts: 3,047, Reputation: 199
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    #6

    May 16, 2012, 06:57 AM
    Because dividends are taken out of Net Income, which reduces Ending Retained Earnings. So if you are trying to find Net Income from ending Retained Earnings you have to work the problem backwards and add Dividends to ending Retained Earnings to get Net Income for the period. To double check use your Net Income that you calculated then subtract out your Dividends and you should arrive at the ending Retained Earnings.

    Beginning Owners Equity - $60,000
    Ending Owners equity = $122,000
    Additional Issue of stock = $25,000
    Dividends paid = $8,000
    Net Income = 45,000

    So: Ending Owners Equity $122,000 - Beginning Owners Equity $60,000 - Additional Issue of Stock $25,000 + dividends $8,000 = Net Income $45,000

    Beginning Owners Equity $60,000 + Net Income $45,000 + Additional Issue of Stock $25,000 - dividends $8,000 = Ending Owners Equity $122,000

    Since your equation answer for Ending Owners Equity matches the amount in Ending Owners Equity balance of $122,00 then your Net Income for the period is $45,000
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    1mamala's Avatar
    1mamala Posts: 1, Reputation: 1
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    #7

    Aug 22, 2012, 12:47 PM
    Kirkland Theater sells season tickets for six events at a price of $180. In pricing the tickets, the planners assigned the leadoff event a value of $45 because the program was an expensive symphony orchestra. The last five events were priced equally; 1,200 season tickets were sold for the 2010 season.




    Calculate the theater's earned revenue after the first three events have been presented.
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