PA12_GROUP 3_PE_CH1

Exercise 1.1A

Assets = Liabilities + Equity

Beginning of Year 50,000 = 22,000 + 28,000

End of Year 80,000 = 35,000 + 45,000

a,
Shep Company

Statement of owner’s equity

For Year Ended

Shep, Capital, Beginning of the year $28,000

Add:

Investment 3,000

Net income = 52,000 - 28,000 - 3,000 = 21,000

= 45,000 + 7,000 = 52,000

Less: 45,000 + 7,000

Withdraw by owner 7,000

Net loss

Shep, Capital, End of year $45,000

b,
Shep Company

Statement of owner’s equity

For Year Ended

Shep, Capital, Beginning of the year $28,000

Add:

Investment 15,000
 Net income = 45,000 - 28,000 - 15,000 = 2,000

45,000

Less:

Withdraw by owner 0

Net loss

Shep, Capital, End of year $45,000

c,
Shep Company

Statement of owner’s equity

For Year Ended

Shep, Capital, Beginning of the year $28,000

Add:

Investment 0

Net income = 57,000 - 28,000 = 29,000

= 45,000 + 12,000 = 57,000

Less:

Withdraw by owner 12,000

Net loss

Shep, Capital, End of year $45,000

Exercise 1.2A

Assets = Liabiliti + Equity

es

Cash +Account +Supplie +Equipme = Account +Owner’s - +Revenue - Expense

Receivabl s nt payable capital Owner’s s
e drawing
a $70,000 +$10,000 = +$80,000

b -$40,000 +$40,000 =

c -$15,000 +$15,000 =

d +$1,200 +$1,700 = +$2,900

e -$500 = -$500

f +$2,800 = +$2,800

g +$4000 = +$4,000

h -$3,275 = -$3,275

i +$1,800 -$1,800 =

j -$700 = -$700

k -$1800 = -$1,800

to $14,525 +$1,000 +$1,200 +$66,700 = $2,200 +$80,000 -$3,275 +$6,800 -$2,300

tal

$83,425 = $83,425

b,
Net income = Revenues - Expenses
= $6,800 - $2,300
= $4,500