Exercises Chapter 1 Nome: Zewela Garcia Micouada —__ Using the accounting equation Exorcie 1-8 Example: Determine the missing amount from each of the seperate situations given below. Alternative Determine the missing amount from each of the separate situations given below 192,000 $145,000 + $47,000 120,000 62,000 226,000 + 75,000 ove Using the accounting equation Exercise 1.9 ‘Answer the following questions (Hint: Use the accounting equation} Example: 2 At the beginning ofthe yoar, Adalson Companys assets are $300,000 and its ecully 1s $109,000 Dunng the year, assets increase $30,000 and labities increase $50,000 What ise equly atthe end of the year? Begging 120,000 400,000 100/600 ried $2,c0Oo = SOMO + 30,000 Eokey 280,000 30,000 (30/600brercise 1-8 Framole = habs lities Equity 9) 6 coo 3) 145 060 Jag 000 +) 120 200 Ib) 58.00 Ib) ¢6 CO® 9) 199 e00 Je) 191 @00 je) 42 200 | 319 cca 354 000 ts! 000 | Alteenartive Assets Loder ties. Jat Gawd | (92 oc 4) 149.02 Ja) 47 o@o 8) 20 cao ¥) 9100 1s) 62 000 <) 22¢ coe! 6) 191 coo kk) 39 coo wasn “394 000. 144 008 Exexerse 17% Exoumole As: ln hialaitties | | Beery ) 300 000 8) £00 «Oo Ja) 120 coo Dao ooo 2 000 30 oD 260 000 130 000 Dltervertwe Assets Loki ti Hes Eacity 400 000 469 90° (10 009 ¥) 4% cco 40 000 9 090 8 coo 490 020 200 G00 LAMA ANON NAH NANI IISAlternative: 2 ALthe beginning ofthe year, Addison Company's assets ere $600,000 and its eauty is $150,000 During the yoar, assets increase $90,000 and labitbos increase $40,000. What isthe equity atthe end ofthe year? Beatiang 600,002 6 460,00 109,000 amqe 0,000 940,000 + $0,000 Gniing 620. cco = 490,000 ac. 000 Example: bb Office Store has assets equal to $123,000 and labities equal to $47,000 et year-end: Whats the tte ‘equly for Office Store at year-end”? | 123 00) 47 O36 COO Alternative: » Office Store has assets equal fo $160,000 and habities equal to $40,000 ot year-end, Whats the total equity for Office Store at yeer-ona? Example: «At the beginning of he year, Quaker Company's taities equal $70,000 Ounng the year assets increase by $50,000, end at year-end assets equal $180,000 Liabiites decrease $5,000 during the yeer What ee the beginning and ening ameuris of equty/? 2 000 3 130 000. 70.000 ei coo - 5000 <2 000 E tae 000 65 oc 125 202 Alternative: «At he beginning of he year, Quaker Companys babes equal $100,000 During the yoor, assets incroate by $40,000, end at year-end asels equel $220,000 Ladies decrease $25,000 during the yoor What are the beginning and ening amaurts of ect?Example 2. a 8 Mtemnadwe 2 8 § Erowmele 3. 8) (39 coo Y © xo 650 e900 uy Alkemative 3 Axe, 190 eco 4@ 0co ato 0 i = __Liedbtli tee: 49 co + __hictoitches 0 oco -s 00 69 000 4 Lootbi ibve> |- 26 020 39 00 129 600 €o @0o ce 00 129 coo + it 90.200 69 c00 i565 200 HHOAAAANRAAOAHSDIDIIS.,Return on Assets Exercise 1-14 Example: ‘Swiss Group reports net income of $40,000 fo the cuter yeer At the begining ofthe year, Sass ‘Group had $200,000 in assets. Bytho end of ho year, assets had grown to $300,000 Whats Swiss Groun's fourm en ase? Netincome + erage Toa aseee = Return on sete 40 .COO- 40 166 erage Tota Ants For exert, dor thott go invest wm exets , 4ou AE IG conts back 200/000 + 3@) GOO — ee wo fete emer party ocesy ec 40 cap = 960 ocd = 16 een tc ue) eee’ AC KI = Alternative: ‘Suiss Group reports net incama of $70,000 forthe currant year Al the beginng ofthe year Ss ‘Group fad $300,000 n assets By the end ofthe year, assets had grown to $400,000 Wht s Sass Group's return on assets? oe cco 260 000 20%. For every dolor thet you wvest we onsets, you howe +2 conte back 202 eco + 400 coo = 360 00 | Pete et meta ‘management, analyzingand forecasting profits, Seema Cree Lo} Breau ohare a statement of retained earnings xorcise 1-16 Example: (On October 1, Ebony Emst organized Emst Consutng, anew consting firm. on Octobe 3, the owner corres 584.000 ash’ On October 31, the company’s records show te folowra items and amounts. Use tis infomation to propare an October statement of retained earings forthe Busines cash ‘311.360 ‘Accounts recevable 14,000 Ofteesuppes| Land Offeo equpment Aecourts payable Commen stock ‘cosh eidende 2000 CConsuting fes eamed 14000 ert expense 3.550 Saltes expense 7900 Tetephane expense 760 Nisbeteneous expenses 580 Telained Earnings « Ostoroor 5 © ck mcome -? Add aus Dindends > bess 2.000 Retawed Carnage .Getober 3} ao Alternative: (on October 1, Ebony Emst organized Ernst Consutng. sew consubrg Arm, on October 3, the onner contributed $71,500 cash On Ceteber 21, the company’s records show the foloring tems end ameunts Use this information femert of retained earnings fr tne business to prepare an October casn $11,250 ‘Accounts recewable 23,000 Offce supoes| 1.200 Lond 30,000 tice equpment 18.000 ‘Accouns payable 5.000 Common stock 11500 Dirdends Retonned Eorvungs , Cctdoes 31 Cash daconds Consuting fees eames Rent expense Salanes @pense Tokpnene expense Miscelaneous expenses > hess. $2000 25,000 4.500 10,000 850 709Prepare an income statement Exercise 145, Example ‘on October 3, Ebony Ernst organized Ernst Ceesung, arom consuting fm, on October 3, th onner cortrtued £34,000 coun’ On October 31 tw companys records show te bong Hes and ancunts Use tas information to prepare an clabor income Sateen fer the busnaes casn $1380 coun tends $2.00 ‘Accounts ecovabie 14.000 Consus 005 earned 14.000 Otte suppes 3.250 Fert expose 3550 46,000, Salones epense 7.000 18000 Telephone pense 760 5.500 Mecolameus expensas 00 28.000 Revenues, Consciting Cass earned 14 coo ermenses Rent 3 setae 338, Felegrone Seo isitancees 380 < 1 890 Sk income Clea) ae) Alternative: ‘on October 1, Ebony Ernst organized Eat Const, a nee consling fem. on October 3, te onner connbuted $7.00 coun’ On Gutber 31 be companys reeerds chow te Tobouing Hams ong ames. Use Ps ntrabon 1b propore an Octaber income slaloment forte Business caen s11250 cash dens 2.000 Accounts recovasle 23,000 CCorautng fos eared 25,000 ‘tice suppres 1.200 Rent orpense ‘500 ane 30,000 Salanes expense 0,000 (fc ecuement 8.000 “wuphon expense 260 ‘coounts payode "5.000 Miseoloneous pense 700 Common Stoo 71500 "Gorsotting, bees eaveed 36 0c Ermenses Pent 4 900 Seteeie> 19. @O Teleprone 560 Hescettaneoes ‘Net income 88)Prepare a Balance Sheet fxercise 147 example: (on octber 1, Ebony Ernst erganzed EmstCorsiing, a new cansubng fr. on Octobe 2, te over contbuted {$54.00 cosh On October 31, Be companys recards shaw the fotowng Hams and emourts Use ts information to prepare en O:tober 31 Balance Sheet lor the Busnoss cash 11300 Cann dons $2,000 Accotees reconabe 14000, 44.000 Office sueples 3.250 3550 Len 46 000 17600 (mes equpmert ‘a.000 Tasprons. expanse 700 Recounts payatla 8.500 Micelanecus openses 580 Common sok 24 000 = oe 28 M1 co Becscrnts gate +900 Recounts reaueible 14 609 | oe Ceeice soppten 3300 ine aS Eauty Clee cwoment — 19 60° | Goran te 4000 eed tre Total of backs «2 610 | 2 Motel Lotalihes ond pity 92 610 Alternative: ‘on October 1, Ebony Emet arganzed Ermst Consutng, @ new consuling firm, on October 3, the enner conbuled {$71,500 cash On October 31. he comoany/s records show the foloning tmns end amounis. Use tes informabon to prepare an Octover balance sheet for Emst Consutng cash $11.25 Cash didonas Accounts recenable 23,000 CGonsulung fees eared Office sunpt 1,200 ent expanse Lana 30,000 Salas expense Ctfice equement 18,000 Telopnone expense ‘Accounts payatle 5,000 Mscelaneous expenses aaets Uabiies 1.290 | Accounts paysble 8000 Recousts veawsihe 33.000 | oeeice supplies 1 300 hema 39 020 Equity Rhee caqunpmennt 15 000 Common toel 91 B00 ee ietained eetecngs 6 460 | Tote o Assets 53460 was Total Mabibhes and &yidy #3 450Prepare a statement of cashflows Exercise 118 Sample: (on October 1. Ebony ms! exgenzes Ems Conetig, 2 nen ensuing fm: on Octeba 3, the ner coibues tassels o $4000. ‘On October 3, the campans records show he flowing toms and anours. Use hs Inernalion to prepare the Ocobersatemert cashflows for Ine buses. ‘casn sr360 Mendis $2000 Accounts ocehable 14000 ‘Consung fos snag 14000 ‘tes sippias Rent 3380 und Solan expense 71900 fice equip Teaphone exgense 760 ‘Account payabe Miscotaneus expenses 00 Cenmon stock za assim th tong a The one’s lila nvestment consi ef $36,000 cash and 46009 In an 5 The conpanys $18.000 equipment purenese pad caeh, Tho scours payable belance cf $8,500 canst ofthe $3,250 ofee tuples puenase and $6,250 In employe sales yelo be pal 4 The companys rel telephone ané mscetanecut expenses ar pals inca, ¢. Ne cash hos been celecied one $6,000 conautng fees eained. mat Consulting can suiaea’ Statementot Cash Flows Accounts recovabe 14,000, For Month Ended october 31 nce spas 3280 Cash Flows Gram operating, achirles tan smo Ractived trom ceahamer 0, peotdapens lied} Paid 40 employes | 41390) Conmen sock 06000 — Zaid. ov rent oe) pam See Rhee bleprewe expavnars 320) Conn oer sored tesa 76d Cor imscciasc0 pera. z Rent expense SSD UN cool wad pert achnhues 640) Sates oparse “7000 Cea Gour Com mmestong chines Bem, Telephone epense 180. Rad for MPce etuprment wx) Ascatamcus operses HBO> Wt case used ty ancoting atiahes Or 00) Goon Flos Foon Raney edi hies Ger reewed ~ common stock SOD Dudes Gos) Nek erie provided by Cremeans acts «36.0 Wek yereoce on ten 1300 Coch bolenee 1 October 4 ° Coty balrwer ,Qclober 31 1360) 2, Te owners inal vesment consists of $38,000 cash and 46,00 The companys $18,000 equpment purchase I pai in cash, ‘The acount payble balance of $8,500 consists ofthe $3.260 ote supplies purchase and 85.250 in compleyee suas yet tobe pad The companys ret, elephore andriselaneous expenses are pln cash Ne cash nas been eaeceg onthe S14 000 conuting Tees eared‘erative: con Cetober 1, Ebony Ematorgarized Est Conutng @ new ensuing fm: on Oclber 3th ave! conrbues sets or 148480,” On Ocaber 31 the companys records show the folowing Hens and aroun, Use Is Infomation to prepare the Oclber statement of cash fos forthe business. ‘cash $20,000 Didends 4.000 ecountsrecevable 25000 CConsuting foes earned 25,000 ‘Office supples 5720 Rent expense 630 and 81,000 alates expense 12,900 fies equpment 32,000 “elephane expense 41380 Accounts payable 15000 scallaneous expenses 11040 Ccormnon stock ‘wo4so ‘so assume the folowing ‘The onmers inal ivestment consists of $7 450 cash and $81,00 nnd The companys $22,000 equipment purchase Is paid in cash. The accounts payable telance of 16000 consis fe $5.720ofce supplies purchase nd $9,280 n ‘employee sales ye lobe pad. 4. The compan’ rer, elephone endsniscelanecus expenses are plé ca f. Nocash hes been eoetad on the $25,000 consung fees eae con ‘0000 erst consuting cout erie 25.000 ‘sttemontet cash Flows once pies om “For Month Ended October 31 und 81000 can Chau Crom operating acts ev oupe 000 ed hom entomer>™ so pecs payee 15000 5 Common Sock 84s) id. to mplonees (2720) Diatends tomo A fer cmd (6-340) Cute cared om Ted Be elegans (i320) art pense tomo Bid Cor maelloneoes Lee) Sane eperse 12000 SY coon ah og eferabs actanhics it 490 Tepe parse 1360 Can Gaus Comm smeshag, oohined Mecano emewet 1040 Gaus Yor uc ewipment (22000) Soh cao ned ty vege Game Sis Bre Ra SE ad ate reseuad = common dake (C64 40) Suudends bet oe ped bg Coe ook Ne oe ota (2.220) Go) 63 40 20 0 (Cooh balowce , Octaleer 4 Cas \oslowie sOctower 3) 30 2. The cone’ ri ivesmart conse of 67.450 cash aa $1.00 tan The companys $2000 equpeent purchase Is pai can {Theaters yb nc 1500 cee he 5720 oC spies pens and 8290p ‘employee selares yet to be paid. se el 41 Toe conpangs rn elopreneandmiscelanous exerses are pa cash, No aan ha ben cbected one $25,000 consing fee