Chapter 1 exercises

1. Cool Tours had beginning equity of $72,000; net income of $25,000, and
withdrawals by owners of $9,000. Calculate the ending equity. 

2. Della's Donuts has revenues of $83,000 and expenses of $64,000. Calculate

its net income.

3. ParFour's total liabilities are $130,000 and its equity is $340,000. Calculate
the company's total assets.

4) At 31 Dec, 2011, the assets and liabilities of Bike Co. are as follows: Cash
$4000; Accounts Receivable, $850; Inventories, $5200; equipments $13,000;
Accounts Payable, $1530, salaries payable $2000. What is the amount of
owner's equity as of Dec 31, 2011?

Assets = Liabilities + Equity

Cash + Building Note Contributed Revenue Salary

payable capital + - expense

$ $ 100,000
100,000

(15,000) 50,000 35,000

(1,000) (1000)

(35,000) (35,000)

5000 5000

54000 0 100,000 + 5000

50000 - 1000

$104,000 $104,000
=

d) Paid note for cash, $35,000.  cash decreases, not payable decreases

e) Provided auditing services for $5000.  Revenue increases, cash increases