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TaylorIrene21
Jan 21, 2014, 02:32 PM
BEGINNING
Assets - 28000
Liabilities - 18600

ENDING
Assets - 30000
Liabilities - 17300

DURING THE YEAR
Sales Revenue -??
Expenses - 8500
Dividends - 3000

What would be the sales revenue?

pready
Jan 21, 2014, 04:48 PM
First you have to get both the beginning and ending Owners Equity. The formula is: Owners Equity = Assets - Liabilities

Now you have to account for the change in Owners Equity. The basic formula for this is: Ending Owners Equity = Beginning Owners Equity + Net Income (Revenues - Expenses) - Dividends.


This formula can be rewritten as:

Sales Revenue = Ending Owners Equity - Beginning Owners Equity + Expenses + Dividends