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 $ 10 000 $10 000
Accounts Receivable 22 000 $22 000
Land 30 000 $30 000
Personal Automobile 9 000 $9 000
Business Bank Balance 3 150 $3 150
Home Furniture and Appliances 8 250 $8 250
Trucks and Equipment 84 000 $84 000
Owner purchased a second house for rental purposes 105 000 $105 000
Buildings 120 000 $120 000
Office Equipment 24 000 $24 000
Personal Bank Balance 2 860 $2 860
Supplies 8 250 $8 250
House and Lot 86 500 $86 500
Total Assets $291 400 $221 610

Liabilities Amount Business Personal

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

Owner’s Equity Business Personal

N. Ulrich, Capital $211 700 $81 610
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 ___A_____
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.
Assets= 120 000 + 90 000= 210 000 – Liabilities= 90 000 + 20 000= 110 000
210 00 – 110 000= $100 000 Equity at December 31 20-2
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.
Liabilities= 110 000 + 25 000= 135 000
Assets=210 000 + 20 000= 230 000
230 000 – 135 000= 95 000
Equity= 100 000 – 5000= 95 000
The company’s assets increased by 20 000