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 10000
Accounts Receivable 22 000 22000
Land 30 000 30000
Personal Automobile 9 000 9000
Business Bank Balance 3 150 3150
Home Furniture and Appliances 8 250 8250
Trucks and Equipment 84 000 84000
Owner purchased a second house for rental purposes 105 000 105000
Buildings 120 000 120000
Office Equipment 24 000 24000
Personal Bank Balance 2 860 2860
Supplies 8 250 8250
House and Lot 86 500 86500
Total Assets $177400 $335610

Liabilities Amount Business Personal

Accounts Payable $ 5 500 5500
Bank Loan on Office Equipment 9 200 9200
Mortgage on House and Lot 55 000 55000
Mortgage on Building 65 000 65000
Mortgage on Rental House 75 000 75000
Personal debt to his father 10 000 10000
$79700 $140000
Total Liabilities

Owner’s Equity Business Personal

N. Ulrich, Capital $97700 $195610
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 _L______

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.
E=A-L
E = (120000+90000) – (50000+20000)
E =210000 -70000
E =$140000
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.
A=L+E
A = (70000-5000) + (50000+25000)
A = 65000 + 75000
A = $140000

A=L+E
140000 = (70000-5000) + (50000+25000)
140000 = 65000+75000
140000 = 140000

The assets would increase to $140000 from $120000