Accounting Exercises

Norman Ulrich is the owner of Metropolitan Cartage Company in Halifax, Nova Scotia.
His personal and business assets are listed below.
a) Separate the amount list below into the two columns provided.
b) Calculate the total assets and the total liabilities in each column.
c) Calculate Norm Ulrich’s personal net worth and his equity in Metropolitan Cartage Company.

Assets Amount Business Personal

His Canada Savings Bonds $ 120 000 10 000
Accounts Receivable 24 000 86 500
Land 30 000 105 000
Personal Automobile 84 000 9 000
Business Bank Balance 22 000 2 860
Home Furniture and Appliances 3 150
Trucks and Equipment 8 250
Owner purchased a second house for rental purposes
Buildings
Office Equipment
Personal Bank Balance
Supplies
House and Lot
Total Assets $291,400 $213,360

Liabilities Amount Business Personal

Accounts Payable $ 5 500 55 000
Bank Loan on Office Equipment 9 200 75 000
Mortgage on House and Lot 65 000 10 000
Mortgage on Building
Mortgage on Rental House
Personal debt to his father $79,700 $140,000
Total Liabilities

Owner’s Equity Business Personal

N. Ulrich, Capital $370,000 $353,360
Classify each of the following as an asset (A) or a liability (L) of ABC Company.
a) Accounts receivable __A______
b) Unpaid telephone bill __L______
c) Canada Savings Bonds __A______
d) Bank loan ___L_____
e) Amount owed to C. Evans ___L_____
f) Office furniture ___A_____
g) An amount owed by J. Draper _____L___
h) Accounts payable ___L_____
i) Money in the bank ____A____
j) Supplies __A_____

On December 31, 20-1, A. Silver’s accounting equation was as follows:

Assets (120 000) – Liabilities (50 000) = Equity ($70 000)
a) If, during 20-2, the assets increased by $90 000 and the liabilities increased by $20 000, calculate
the owner’s equity at December 31, 20-2. Show your calculations.
120,000+90,000=$210,000 (Assets- $210,000)
50,000+20,000=$70,000 (Liabilities- $70,000)
$210,000 - $70,000 [Equity = $140,000]

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b) If a company’s liabilities increase by $25 000 and its equity decreases by $5 000, what change
occurs in the assets? Show your calculations.
That would mean the Assets have increased by $5,000
Assets = $50,000 Liabilities= $75,000
Equity would then be $25,000?_________________________________________________________________
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