Reference no: EM131473453
Exercises Assignment
1. Basic computations. The following selected balances were extracted from the accounting records of Rossi Enterprises on December 31, 20X3:
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Accounts Payable
|
$3,200
|
Interest Expense
|
$2,500
|
|
Accounts Receivable
|
14,800
|
Land
|
18,000
|
|
Auto Expense
|
1,900
|
Loan Payable
|
40,000
|
|
Building
|
30,000
|
Tax Expense
|
3,300
|
|
Cash
|
7,400
|
Utilities Expense
|
4,100
|
|
Fee Revenue
|
56,900
|
Wage Expense
|
37,500
|
a. Determine Rossi's total assets as of December 31.
b. Determine the company's total liabilities as of December 31.
c. Compute 20X3 net income or loss.
2. Accounting equation; analysis of owner's equity. Sportscar Repair revealed the following financial data on January 1 and December 31 of the current year.
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Assets
|
Liabilities
|
|
January 1
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$45,000
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$20,000
|
|
December 31
|
49,000
|
31,000
|
a. Compute the change in owner's equity during the year by using the accounting equation.
b. Assume that there were no owner investments or withdrawals during the year. What is the probable cause of the change in owner's equity from part (a)?
c. Assume that there were no owner investments during the year. If the owner withdrew $17,000, determine and compute the company's net income or net loss. Be sure to label your answer.
d. If owner investments and withdrawals amounted to $13,000 and $2,000, respectively, determine whether the company operated profitably during the year. Show appropriate calculations.
3. Financial statement relationships. The following information appeared on the financial statements of the Altoona Repair Company:
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Income statement
|
|
Total expenses
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$ 64,900
|
|
Net income
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7,200
|
|
Statement of owner's equity
|
|
Beginning owner's equity balance
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$ 113,200
|
|
Owner withdrawals
|
61,300
|
|
Ending owner's equity balance
|
70,800
|
|
Balance sheet
|
|
Total liabilities
|
$ 97,000
|
By picturing the content of and the interrelationships among the financial statements, determine the following:
a. Total revenues for the year
b. Total owner investments
c. Total assets
4. Statement preparation. The following information is taken from the accounting records of Grimball Cardiology at the close of business on December 31, 20X1.
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Accounts Payable
|
$14,700
|
Surgery Revenue
|
$175,000
|
|
Surgical Expenses
|
80,000
|
Cash
|
60,000
|
|
Surgical Equipment
|
37,000
|
Office Equipment
|
118,000
|
|
Salaries Expense
|
30,000
|
Rent Expense
|
15,000
|
|
Accounts Receivable
|
135,000
|
Loan Payable
|
10,300
|
|
Utilities Expense
|
5,000
|
|
|
All equipment was acquired just prior to year-end. Conversations with the practice's bookkeeper revealed the following data:
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Rose Grimball, capital (January 1, 20X1)
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$300,000
|
|
19X1 owner investments
|
2,000
|
|
19X1 owner withdrawals
|
22,000
|
Instructions
a. Prepare the income statement for Grimball Cardiology in good form.
b. Prepare a statement of owner's equity in good form.
c. Prepare Grimball's balance sheet in good form.
5. Financial statement preparation. On October 1, 20X6, Susan Thompson opened Thompson Decorating Services, a sole proprietorship. Susan began operations with $50,000 cash, 60% of which was acquired via an owner investment. The remaining amount was obtained from a bank loan. A review of the accounting records for October revealed the following:
• Asset purchases: Van, $16,000; office equipment, $4,000; and decorator (household) furnishings, $17,000. These amounts were paid in cash except for $2,100 that is still owed for the furnishings acquisition.
• Services performed: Total billings on account, $18,300. Clients have remitted a total of $14,200 in settlement of their balances due.
• Expenses incurred: Salaries, $8,700; advertising, $2,500; taxes, $150; postage, $1,800; utilities, $100; interest, $450; and miscellaneous, $200. These amounts had been paid by month-end with the exception of $700 of the advertising expenditures.
Further information revealed that Thompson withdrew $5,500 of cash from the business on October 31.
Instructions
a. Prepare an income statement for the month ending October 31, 20X6.
b. Prepare a statement of owner's equity for the month ending October 31, 20X6.
c. Prepare a balance sheet as of October 31, 20X6.
6.
Basic journal entries. The following April transactions pertain to the Jennifer Royall Company:
4/1: Received cash of $15,000 and land valued at $10,000 from Jennifer Royall as an investment in the business.
4/5: Provided $1,200 of services to Jason Ratchford, a client.
4/5: Ratchford agreed to pay $800 in 15 days and the remaining amount in May.
4/9: Paid $250 in salaries to an employee.
4/19: Acquired a new computer for $3,200; Royall will pay the dealer in May.
4/20: Collected $800 from Jason Ratchford for services provided on April 5.
4/24: Borrowed $7,500 from Best Bank by securing a 6-month loan.
Prepare journal entries (and explanations) to record the preceding transactions and events.
7.
Trial balance preparation. Brighton Company began operation on March 1 of the current year. The following account balances were extracted from the general ledger on March 31; all accounts have normal balances.
|
Accounts Payable
|
$ 12,000
|
Interest Expense
|
$ 300
|
|
Accounts Receivable
|
8,800
|
Land
|
?
|
|
Advertising Expense
|
5,700
|
Loan Payable
|
26,000
|
|
Bob Brighton, Capital
|
30,000
|
Salaries Expense
|
11,100
|
|
Cash
|
22,500
|
Utilities Expense
|
700
|
|
Fees Earned
|
18,900
|
|
|
a. Determine the cost of the company's land by preparing a trial balance.
b. Determine the firm's net income for the period ending March 31.
Attachment:- Guidance_Report.rar