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Q7SE

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 218

Short Answer

A partial worksheet for Ramey Law Firm is presented below. Solve for the missing information. Total 6 5 A J K L M 33 34 35 (a) $ 211,325 $ 202,950 (e) 8,375 (d) $ 24,850 $ 24,850 Debit Credit Debit Credit Income Statement Balance Sheet Net (b) (c) Total (f).

(a) $16,475

(b) Income

(c) $8,375

(d) $24,850

(e) $211,325

(f) $211,325

See the step by step solution

Step by Step Solution

Step 1: Explanation on (a)

Total debit in income statement is calculated as follows:

Step 2: Explanation on (b)

In the income statement, total credits (revenues) are higher than total debits (expenses), hence it will result in net income.

Step 3: Explanation on (c)

Net income is transferred to the retained earnings, hence in the worksheet it will be posted under credit side under balance sheet section.

Step 4: Explanation on (d)

In the income statement, total credit balance equals $24,850, hence total debit balance should also be equal to $24,850.

Step 5: Explanation on (e)

In the balance sheet section, total credit balance equals $211,325, hence total debit balance should also be equal to $211,325.

Step 6: Explanation on (f)

As net income of $8,375 is posted on credit side of balance sheet, the total credit balance equals $211,325.

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