Case 2-3:- Lone Pine Cafe

Assests = Liabilities + Owner’s

Equity
Cash Equipment Food & Prepaid Cash Local Clothing Loan Capital Theft expense RE
beverages Rent register operating
license

As of Novermber 2, 2009

48000 48000
-1500 1500
21000 21000
-53200 53200
-2800 2800
-1428 1428
-1400 1400
8672 53200 2800 1500 1400 1428 0 21000 + 48000 0 0
69000 = 69000

As of March 30, 2010

1030 1030

-719 -719
870 870
-1583 -1583
-2445 -2445
2430 2430
750 750
-21000 -21000
47598 -2445 2430 0 0 0 750 = 48000 + -2445 -719 3497
48333 = 48333

16111

1
Cafe
Comments Questions

Q1

Capital added by the owners

Prepaid rent for the next month
Loan taken from the bank
Equipment bought from the owner
Food & beverages from previous owner
Bought license
bought cash register

Q2
Checking account balance was 1030 however except 311 remaining
was taken by Mr. Antoine and Mrs. Sanders

Theft expense recorded as 719 Will this be recorded? For the 3rd question will this be
disregarded?
Charge for Ski Instructors
Amount owed to suppliers
Accumulated depreciation
food and beverage on hand
Mr. Antoine’s clothing as asset Will this be recorded as asset?
loan amount repaid

Q3-> yes they would have because the expenses and assets recorded
as of March 30, 2011 showed 111 more in the individual owner’s
equity

2
 Problem 2-2
Assests = Liabilities + Owner’s Equity Comments
Cash Building Land Equipment Accounts Inventories Investment Marketable Notes Payable Bonds Payable Accrued expenses Taxes Payable Accounts payable Capital RE
Receivable securities

$ 89,000 $ 1,120,000 $ 230,000 $ 761,000 $ 505,000 $ 513,000 $ 320,000 $ 379,000 $ 200,000 $ 700,000 $ 107,000 $ 125,000 $ 241,000 $ 1,000,000

-$ 538,000 -$ 386,000
$ 89,000 $ 582,000 $ 230,000 $ 375,000 $ 505,000 $ 513,000 $ 320,000 $ 379,000 $ 200,000 $ 700,000 $ 107,000 $ 125,000 $ 241,000 $ 1,000,000 $0

$ 2,993,000 = $ 2,373,000

P 2.2 Retained $ 620,000

earnings

Solution PDF https://kupdf.net/download/solutions-chapter-2-accounting-anthony-hawkins-merchant_58c9f56fee34352a775f0b70_pdf

3
 Problem 2-3
Assests = Liabilities + Owner’s Equity Comments
Cash Plant & Accounts Inventories Investment Marketable Notes Payable Bonds Payable Dividends payable Accounts payable Capital RE
Equipment Receivable securities

$ 100,000 $ 100,000 Capital stock issued

-$ 25,000 -$ 25,000 Bonds payable refunded with capital stock

-$ 8,500 -$ 8,500 Depreciation for the year
-$ 15,900 $ 15,900 inventory purchased with cash
$ 9,400 $ 9,400 inventory purchased with credit
$ 7,200 -$ 4,500 $ 2,700 inventory sold on credit

$ 3,500 -$ 3,500 Cash recieved for merchandise sold on credit

$ 3,000 Dividends declared

-$ 3,000 declared Dividends paid
$ 62,600 -$ 8,500 $ 3,700 $ 20,800 $0 $0 $0 $0 $ 3,000 -$ 15,600 $ 91,500 -$ 300

$ 78,600 = $ 78,600

4
 Problem 2-5
Assests = Liabilities + Owner’s Equity Comments
Cash Land Building Inventories Investment Marketable loan Bonds Payable Dividends payable Accounts payable Capital RE
securities

As of June 1st $ 50,000 $ 50,000 $ 100,000 Carson contributed cash and legatt contributed 50000
inveentory

-$ 24,000 $ 24,000 Additonal shoe inventory purchased

$ 31,000 -$ 15,500 $ 15,500 Cash sales
-$ 6,200 -$ 6,200 carson withdrew cash drawings
-$ 3,700 -$ 3,700 Larson withdrew cash drawings

$ 50,000 $ 50,000 Loan from Third National Bank

-$ 75,000 $ 25,000 $ 50,000 Land & building purchased with cash
$ 22,100 $ 25,000 $ 50,000 $ 58,500 $0 $0 $ 50,000 $0 $0 $0 $ 90,100 $ 15,500
As of June 30th $ 155,600 = $ 155,600

Carson Legatt
Capital June 1 $ 50,000 Capital June 1 $ 50,000
additions $ 7,750 additions $ 7,750

drawings -$ 6,200 drawings -$ 3,700

$ 51,550 $ 54,050