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The December 31, 2021 (pre-closing) adjusted trial balance for Kline Enterprises was as follows: Account Title Debit Credit Accounts payable 95,000 Accounts receivable 175,000 Accumulated depreciation—equipment 265,000 Common stock 495,000 Cash 31,000 Cost of goods sold 485,000 Depreciation expense 65,000 Equipment 710,000 Interest expense 9,000 Inventory 155,000 Note payable (due in six months) 65,000 Rent expense 35,000 Retained earnings 72,000 Salaries payable 13,000 Sales revenue 785,000 Salaries expense 125,000 Totals 1,790,000 1,790,000. Assuming no income taxes, compute the Kline's 12/31/21 total shareholders' equity:

Answer :

Answer:

$633,000

Explanation:

In order to determine the total shareholders' equity, first we have to find out the net income which is shown below:

Net income equals to

= Sales revenue - cost of goods sold - depreciation expense - interest expense - rent expense - salaries expense

= $785,000 - $485,000 - $65,000 - $9,000 - $35,000 - $125,000

= $66,000

Now the total shareholders' equity is

= Net income + common stock + retained earnings

= $66,000 + $495,000 + $72,000

= $633,000

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