Questions: Determine the percentage of assets that were provided by retained earnings. Note: Round your percentage answer to 1 decimal place. Percentage of assets %.

To determine the percentage of assets that were provided by retained earnings, we need to follow these steps:

1. Calculate Total Assets at Year-End:

   • Start with the initial cash balance (if any) and add/subtract the cash flows from the events.
   • Consider the land purchase and its market value, but note that the market value change does not affect the accounting records unless the land is sold or revalued in the books.

2. Calculate Retained Earnings at Year-End:

   • Start with the initial retained earnings balance (if any).
   • Add net income (revenues minus expenses) for the year.
   • Subtract dividends paid to stockholders.

3. Calculate the Percentage:

   • Use the formula: \(\text{Percentage of Assets from Retained Earnings} = \left(\frac{\text{Retained Earnings}}{\text{Total Assets}}\right) \times 100\).

Let's go through the calculations:

• Initial Cash Balance: Assume $0 if not provided.

• Cash Flows:

  • Acquired $10,000 from common stock.
  • Paid $25,000 for land.
  • Borrowed $7,500.
  • Provided services for $37,500.
  • Paid $1,500 for utilities.
  • Paid $22,500 for other operating expenses.
  • Paid $2,500 in dividends.

  Net Cash Flow: \[ 10,000 - 25,000 + 7,500 + 37,500 - 1,500 - 22,500 - 2,500 = 3,500 \]

• Land Value: $25,000 (purchase price, not market value for accounting purposes).

• Total Assets: \[ \text{Cash} + \text{Land} = 3,500 + 25,000 = 28,500 \]

• Net Income: \[ \text{Revenue} - \text{Expenses} = 37,500 - (1,500 + 22,500) = 13,500 \]

• Retained Earnings: \[ \text{Net Income} - \text{Dividends} = 13,500 - 2,500 = 11,000 \]

• Percentage of Assets from Retained Earnings: \[ \left(\frac{11,000}{28,500}\right) \times 100 \approx 38.6\% \]

Therefore, the percentage of assets that were provided by retained earnings is approximately 38.6%.