As of December 31, 2016, Moss Company had total cash of $159,000, notes payable of $85,900, and common stock of $52,700. During 2017, Moss earned $39,000 of cash revenue, paid $21,500 for cash expenses, and paid a $3,300 cash dividend to the stockholders. Required a. Determine the amount of retained earnings as of December 31, 2016.

As of December 31, 2016, Moss Company had total cash of $159,000, notes payable of $85,900, and common stock of $52,700. During 2017, Moss earned $39,000 of cash revenue, paid $21,500 for cash expenses, and paid a $3,300 cash dividend to the stockholders.

Required

a.

Determine the amount of retained earnings as of December 31, 2016.   b. & c. Create an accounting equation and record the beginning account balances, revenue, expense, and dividend events under the appropriate elements of the accounting equation.   Explanation: a.   Assets = Liabilities + Stockholders’ Equity       Cash = Notes Payable + Common Stock + Retained Earnings   159,000 = 85,900 + 52,700 + ? Retained earnings = $159,000 – $85,900 – $52,700 = $20,400