1. Accounting Equation
Determine the missing amount for each of the following:
Assets
=
Liabilities
+
Owner’s Equity
a.
$
=
$178,360
+
$557,370
b.
$89,180
=
$
+
$27,870
c.
$42,920
=
$6,130
+
$
2. Accounting Equation
Annie Rasmussen is the owner and operator of Go44, amotivational consulting business. At the end of its accountingperiod, December 31, 2015, Go44 has assets of $720,000 andliabilities of $180,000. Using the accounting equation andconsidering each case independently, determine the followingamounts:
a. Annie Rasmussen, capital, as of December 31,2015.$
b. Annie Rasmussen, capital, as of December 31,2016, assuming that assets increased by $96,500 and liabilitiesincreased by $30,000 during 2016.$
c. Annie Rasmussen, capital, as of December 31,2016, assuming that assets decreased by $168,000 and liabilitiesincreased by $15,000 during 2016.$
d. Annie Rasmussen, capital, as of December 31,2016, assuming that assets increased by $175,000 and liabilitiesdecreased by $18,000 during 2016.$
e. Net income (or net loss) during 2016,assuming that as of December 31, 2016, assets were $880,000,liabilities were $220,000, and there were no additional investmentsor withdrawals. $
3. Accounting Equation
Todd Olson is the owner and operator of Alpha, a motivationalconsulting business. At the end of its accounting period, December31, 2013, Alpha has assets of $820,870 and liabilities of $259,390.Using the accounting equation and considering each caseindependently, determine the following amounts.
a.
Todd Olson, capital, as of December 31, 2013.
$
b.
Todd Olson, capital, as of December 31, 2014, assuming thatassets increased by $129,700 and liabilities increasedby $77,980 during 2014.
$
c.
Todd Olson, capital, as of December 31, 2014, assuming thatassets decreased by $64,850 and liabilities increasedby $22,980 during 2014.
$
d.
Todd Olson, capital, as of December 31, 2014, assuming thatassets increased by $108,350 and liabilities decreasedby $41,040 during 2014.
$
e.
Net income (or net loss) during 2014, assuming that as ofDecember 31, 2014, assets were $1,034,300,liabilities were $168,280, and there were no additional investmentsor withdrawals.
$
4. Asset, Liability, and Owner’s Equity Items
Indicate whether each of the following is identified with (1) anasset, (2) a liability, or (3) owner’s equity:
a. Accounts payable
b. Cash
c. Fees earned
d. Land
e. Supplies
f. Wages expense
5. Effect of Transactions on Accounting Equation
Describe how the following business transactions affect thethree elements of the accounting equation.
a. Invested cash in business.
b. Paid for utilities used in thebusiness.
c. Purchased supplies for cash.
d. Purchased supplies on account.
e. Received cash for services performed.
6. Transactions
On April 1 of the current year, Andrea Byrd established abusiness to manage rental property. She completed the followingtransactions during April:
Opened a business bank account with a deposit of $45,000 frompersonal funds.
Purchased office supplies on account, $2,000.
Received cash from fees earned for managing rental property,$8,500.
Paid rent on office and equipment for the month, $5,000.
Paid creditors on account, $1,375.
Billed customers for fees earned for managing rental property,$11,250.
Paid automobile expenses for month, $840, and miscellaneousexpenses, $900.
Paid office salaries, $3,600.
Determined that the cost of supplies on hand was $550;therefore, the cost of supplies used was $1,450.
Withdrew cash for personal use, $2,000.
Required:
1. Indicate the effect of each transaction andthe balances after each transaction:For those boxes in which no entry is required, leave the boxblank.For those boxes in which you must enter subtractive or negativenumbers use a minus sign. (Example: -300)
Assets
=
Liabilities
+
Owner’s Equity
Item
Cash
+
Accounts Receivable
+
Supplies
=
Accounts Payable
+
Andrea Byrd, Capital
–
Andrea Byrd, Drawing
+
Fees Earned
–
Rent Expense
–
Sal. Expense
–
Supp. Expense
–
Auto Expense
–
Misc. Expense
Item
a.
a.
b.
b.
Bal.
Bal.
c.
c.
Bal.
Bal.
d.
d.
Bal.
Bal.
e.
e.
Bal.
Bal.
f.
f.
Bal.
Bal.
g.
g.
Bal.
Bal.
h.
h.
Bal.
Bal.
i.
i.
Bal.
Bal.
j.
j.
Bal.
Bal.
2. Owner’s equity is the right of owners to theassets of the business. These rights are by owner’s investments andrevenues and by owner’s withdrawals and expenses.
3. Determine the net income for April.$
4. April’s transactions (a-j) increased ordecreased Andrea Byrd’s capital to?to $
7. On June 1 of the current year, Maria Edsall established abusiness to manage rental property. She completed the followingtransactions during June:
Opened a business bank account with a deposit of $39,000 frompersonal funds.
Purchased supplies (pens, file folders, and copy paper) onaccount, $3,550.
Received cash from fees earned for managing rental property,$9,610.
Paid rent on office and equipment for the month, $4,360.
Paid creditors on account, $1,610.
Billed customers for fees earned for managing rental property,$8,070.
Paid automobile expenses for month, $970, and miscellaneousexpenses, $480.
Paid office salaries, $3,070.
Determined that the cost of supplies on hand was $2,100;therefore, the cost of supplies used was $1,450.
Withdrew cash for personal use, $2,910.
Required:
1. Indicate the effect of each transaction andthe balances after each transaction:For those boxes in which no entry is required, leave the boxblank.For those boxes in which you must enter subtractive or negativenumbers use a minus sign. (Example: -300)
Assets
=
Liabilities
+
Owner’s Equity
Item
Cash
+
Accounts Receivable
+
Supplies
=
Accounts Payable
+
Maria Edsall, Capital
–
Maria Edsall, Drawing
+
Fees Earned
–
Rent Expense
–
Sal. Expense
–
Supp. Expense
–
Auto Expense
–
Misc. Expense
Item
a.
a.
b.
b.
Bal.
Bal.
c.
c.
Bal.
Bal.
d.
d.
Bal.
Bal.
e.
e.
Bal.
Bal.
f.
f.
Bal.
Bal.
g.
g.
Bal.
Bal.
h.
h.
Bal.
Bal.
i.
i.
Bal.
Bal.
j.
j.
Bal.
Bal.
2. Owner’s equity is the right of owners to theassets of the business. These rights are by owner’s investments andrevenues and by owner’s withdrawals and expenses.
3. Determine the net income for June.$
4. June’s transactions (a-j) increased ordecreased Maria Edsall’s capital to?to $
8.
The amounts of the assets and liabilities of Nordic TravelAgency at December 31, 2016, the end of the year, and its revenueand expenses for the year follow. During the year, Ian withdrew$42,000.
Accounts
Amounts
At Jan.1, 2016:
Ian Eisele, capital
$670,000
At Dec.31, 2016:
Accounts payable
$69,500
Accounts receivable
285,000
Cash
190,500
Fees earned
912,500
Land
544,000
Miscellaneous expense
6,400
Rent expense
36,000
Supplies
5,500
Supplies expense
4,100
Utilities expense
28,500
Wages expense
510,000
Required:
1.
Prepare an income statement forthe year ended December 31, 2016.*
2.
Prepare a statement of owner’sequity for the year ended December 31, 2016.*
3.
Prepare a balance sheet as ofDecember 31, 2016.*
4.
What item appears on both thestatement of owner’s equity and the balance sheet?
* Refer to the informationgiven and the lists of Accounts, Labels, and Amount Descriptionsprovided for the exact wording of the answer choices for textentries. Be sure to complete the statement heading. If a net lossis incurred or there is a decrease in owner’s equity, enter thatamount as a negative number using a minus sign.
Labels
December 31, 2016
Expenses
For the Year Ended December 31,2016
AmountDescriptions
Decrease in owner’s equity
Ian Eisele, capital, December 31,2016
Ian Eisele, capital, January 1,2016
Increase in owner’s equity
Investment on July 1, 2016
Less withdrawals
Net income
Net income for the year
Net loss
Net loss for the year
Plus withdrawals
Total assets
Total expenses
Total liabilities and owner’sequity
Labels
December 31, 2016
Expenses
For the Year Ended December 31,2016
AmountDescriptions
Decrease in owner’s equity
Ian Eisele, capital, December 31,2016
Ian Eisele, capital, January 1,2016
Increase in owner’s equity
Investment on July 1, 2016
Less withdrawals
Net income
Net income for the year
Net loss
Net loss for the year
Plus withdrawals
Total assets
Total expenses
Total liabilities and owner’sequity
Labels
December 31, 2016
Expenses
For the Year Ended December 31,2016
AmountDescriptions
Decrease in owner’s equity
Ian Eisele, capital, December 31,2016
Ian Eisele, capital, January 1,2016
Increase in owner’s equity
Investment on July 1, 2016
Less withdrawals
Net income
Net income for the year
Net loss
Net loss for the year
Plus withdrawals
Total assets
Total expenses
Total liabilities and owner’sequity
2. Prepare a statement of owner’s equity for the year endedDecember 31, 2016. Refer to the information given and the lists ofAccounts, Labels, and Amount Descriptions provided for the exactwording of the answer choices for text entries. Be sure to completethe statement heading. If a net loss is incurred or there is adecrease in owner’s equity, enter that amount as a negative numberusing a minus sign.
Nordic Travel Agency
Statement of Owner’s Equity
1
2
3
4
5
3. Prepare a balance sheet as of December 31, 2016. Refer to thelists of Accounts, Labels, and Amount Descriptions provided for theexact wording of the answer choices for text entries. Be sure tocomplete the statement heading.
Nordic Travel Agency
Balance Sheet
1
Assets
2
3
4
5
6
7
Liabilities
8
9
Owner’s equity
10
11
4. What item appears on both the statement of owner’s equity andthe balance sheet?
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