B-01.

06

CUE Corporation was formed at the beginning of 20X2, and presents the following incomplete financial statements
for three years. CUE has requested your help in completing the missing values for each year. Begin by solving the
unknowns in the 20X2 year, and work forward to subsquent years. Remember that 20X2 is the first year of
business, so Cue begins with a zero balance in 20X2 beginning retained earnings.

CUE CORPORATION
Income Statement
For the Years Ending December 31, 20XX
20X4 20X3 20X2
Revenues
Services to customers $ 200,000 ? 21 $ 100,000
Expenses
Wages ? 32 $ 117,000 ? 10
Interest 3,000 ? 31 3,000 ? 20 5,000 ? 9
Net income ? 30 $ 40,000 ? 8

CUE CORPORATION
Statement of Retained Earnings
For the Year Ending December 31, 20XX
20X4 20X3 20X2
Beginning retained earnings ? 29 ? 17 $ -
Plus: Net income ? 30 40,000 ? 8
Earnings available to shareholders ? 28 ? 18 $ 25,000
Less: Dividends 30,000 ? 19 ? 7
Ending retained earnings $ 60,000 ? 16 ? 6

CUE CORPORATION
Balance Sheet
December 31, 20XX
20X4 20X3 20X2
Assets
Cash ? 27 ? 15 $ 50,000
Accounts receivable 65,000 50,000 ? 5
Land 180,000 180,000 180,000
Total assets ? 22 $ 289,000 ? 1
Liabilities
Interest payable ? 26 $ 1,000 $ 2,000
Loan payable 10,000 ? 14 ? 4
Total liabilities $ 11,000 $ 31,000 ? 3
Stockholders' equity
Capital stock ? 25 ? 13 $ 228,000
Retained earnings ? 24 30,000 ? 2
Total stockholders' equity ? 23 ? 12 238,000
Total Liabilities and equity $ 299,000 ? 11 $ 300,000
 2002
Total liabilities + Owners' equity
1 Total Assets = Total assets 300,000
2 Retained earnings: Total equity - common stock 10,000
3 Total liabilities Total
Total assets-total equity
liabilities - interest 62,000
4 Loan payable
Accounts payable 60,000
5 receivable
Ending retained Total assets - Cash & Land 70,000
6 earnings retained earnings
shareholders - retained 10,000
7 Dividends earnings
shareholders - beginning 15,000
8 Net income retained earnings 25,000
9 Total expenses Revenue - Net income
Total expenses - Interest 75,000
10 Wages expense expense 70,000
Total Liabilities & Total liabilities2003+ Owners' equity
11 Owners' Equity =Total
Total assets
Liabilities + Equity - total 289,000
12 Total equity liabilities 258,000
13 Capital stock Total
Total equity - Retained
liabilities - interestearnings 228,000
14 Loan payable payable 30,000
15 Cash
Ending retained Total assets - Acct rec & Land 59,000
16 earnings
Beginning retained retained earnings 30,000
17 Earnings
earnings available Ending
Beginning retained
retainedearnings 2002
earnings + 10,000
18 to shareholders Net income
shareholders - Ending retained 50,000
19 Dividends earnings 20,000
20 Total expenses Wages + Interest expense 120,000
21 Revenue Net income + Total expenses 160,000
2004
Total liabilities + Owners' equity
22 Total Assets: =Total
Total assets
Liabilities & Equity - total 299,000
23 Total equity
Ending retained liabilities
From statement of retained 288,000
24 earnings earnings 60,000
25 Capital stock Total equity - Retained earnings 228,000
26 Interest payable Total liabilities - Loan payable 1,000
27 Cash
Earnings available Total
Endingassets - Acct
retained rec & Land
earnings + 54,000
28 to shareholders
Beginning retained Dividends 90,000
29 earnings Ending retained
shareholders earnings 2003
- beginning 30,000
30 Net income retained earnings 60,000
31 Total expenses Revenue - Net income
Total expenses - Interest 140,000
32 Wages expense expense 137,000