Farrah 55921339 Accounting And Finance Management International Tourism Management Major

Exercise 2.1 Account Cash Account Payable Common Stock Depreciation Expense Net sales Income Tax Expenses Short-Term Investmens Gain On Sale Retained Earnings Dividends Payable Account receivable Short Term Debt Category A L OE E R E A G OE L A L Financial Statement BS BS BS IS IS IS BS IS IS BS BS BS

Exercise 2.4 Financial Statement Total Asset, 12/31/10 Total Liabilities 12/31/2010 Paid-in Capital, 12/31/2010 Retained Earnings, 12/31/2010 Net Income For 2010 Dividen Declared and Paid During 2010 Retained Earning 1/1/2010 Firm A 80.000 80.000 55.000 161.000 68.000 12.000 50.000 FIRM B 435.000 435.000 59.000 186.000 110.000 107.000 124.000 FIRM C 155.000 75.000 45.000 138.500 25.500 16.500 84.500

Exercise 2.6 Retainedd Earnings, December 31, 2010 Decrease in total liabilities during 2010 Gain On the sale of buildings during 2010 Dividends Declared and Paid in 2010 Proceed from sale of common stock in 2010 Net Income for The Year ended December 31, 2010 $841200 183.200 64.400 18.000 197.600 90.400

Retained Earnings per December 31,2010 = (Retained Earning Begins + Net Income) (Dividends Declared and Paid in 2010) Retained Earning Begins (2009) = (Retained Earnings 2010 + Net Income) - (Dividends Declared and Paid in 2010) = ($ 841.200 + $ 90.400) ($ 18.000) = $ 768.800

Exercise 2.16 Liabilities + $ 550.000 $ 24.000 $ 574.000 $ 38.000 $ 612.000 $ (14.000) $ 598.000 Owner's Equity $ 150.000

August 1, 2010, Totals August 3, Borrowed $24000 in Cash From The Bank New Total August 7, Bought Merchandise inventory valued at $38000 on account New Total August 10 paid $14.000 cash for operating expenses New Total August 14, Received Cash/ Merchandise Cost New Total

Assets = $ 700.000 $ 24.000 $ 724.000 $ 38.000 $ 762.000 $ (14.000) $ 748.000 $ 34.000 $

$ 150.000

$ 150.000

$ 150.000 $ 34.000 $

August 17 paid $28.000 owed on account payable New Total August 21, collected $34.000 of account Receivable New Total August 24, repaid $20.000 to the bank plus $400 interest New Total August 29, Paid Kennisha Morgan a cash dividend of $10.000 New Total

782.000 $ 28.000 $ 810.000 $ 810.000 $ (20.400) $ 789.600 $ (10.000) $ 779.600

598.000 $ 28.000 $ 626.000 $ 626.000 $ (20.000) $ 606.000

184.000

$ 184.000 $ 184.000 $ (400) $ 183.600 $ (10.000) $ 173.600

$ 606.000

b. What was the amount of net income (or loss) during August? How much were total revenues and total expenses during August? Answer: Net income = 19,600. Total revenues = 100,000 (the sales recorded Aug 14) Total expense = 14,000 (operating expenses) + 66,000 (cost of goods sold) + 400 (interest) = 80,400 c. What were the net changes during the month of August in total assets, total liabilities, and total owners equity? Total assets increased: 723,600 700,000 = 23,600 Total liabilities increased: 564,000 550,000 = 14,000 Total owners equity increased: 159,600 150,000 = 9,600 d. Transaction Amount August 10, paid $14000 cash for operating expenses -14.000 August 14, received $100.000 in cash from sales of merchandise that had cost $66.000 +34.000 August 24, repaid $20.000 to the bank plus $400 interest -400 August 29, paid Kenisha Morgan a cash dividend of $10.000 -10000 Total revenues and total expenses during August $9.600

Transaction August 10, paid $14000 cash for operating expenses August 14, received $100.000 in cash from sales of merchandise that had cost $66.000 August 24, repaid $20.000 to the bank plus $400 interest August 29, paid Kenisha Morgan a cash dividend of $10.000 Total revenues and total expenses during August

Amount -14.000 +34.000 -400 -10000 $9.600

e. Because dividends are the property of the owner of a company that does not disturb domestic financial f. Because the money borrowed from the bank, is a form of debt, not income that could be considered as being used to increase revenue. g. Because payable and receiveable account is still a matter that has not been received or not used by the company, so it can not be considered as income or expense.