ACCT 211 Homework 1 Accounting in Business Exercises Assignment solutions complete answers
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Question 1
Determine the missing amount from each of the separate situations given below.
Question 2
a. At the beginning of the year, Addison Company's assets are $163,000 and its equity is $122,250. During the year, assets increase $80,000 and liabilities increase $56,000. What is the equity at year-end?
Beginning
Change
Ending
b. Office Store has assets equal to $229,000 and liabilities equal to $201,000 at year-end. What is the equity for Office Store at year-end?
c. At the beginning of the year, Quaker Company's liabilities equal $41,000. During the year, assets increase by $60,000, and at year-end assets equal $190,000. Liabilities decrease $14,000 during the year. What are the beginning and ending amounts of equity?
Beginning
Change
Ending
Question 3
On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $84,920 in assets in exchange for its common stock to launch the business. On December 31, the company’s records show the following items and amounts.
Cash
Accounts receivable
Office supplies
Land
Office equipment
Accounts payable
Common Stock
Using the above information prepare an October income statement for the business.
ERNST CONSULTING
Income Statement
For Month Ended October 31
Revenues:
Consulting revenues
Expenses:
Rent expense
Salaries expense
Telephone expense
Miscellaneous expenses
Net income
Question 4
Using the above information prepare a December statement of retained earnings for Ernst Consulting. Hint: Retained Earnings on December 1 was $0.
ERNST CONSULTING
Statement of Retained Earnings
For Month Ended October 31
Retained earnings, October 1
Add: Net income
Less: Dividends
Retained earnings, October 31
Question 5
Use the above information to prepare a December 31 balance sheet for Ernst Consulting.
ERNST CONSULTING
Balance Sheet
As of October 31
Assets
Cash
Accounts receivable
Office supplies
Land
Office Equipment
Total Assets
Question 6
Also assume the following:
a. The owner’s initial investment consists of $38,900 cash and $46,020 in land in exchange for its common stock.
b. The company’s $18,860 equipment purchase is paid in cash.
c. Cash paid to employees is $2,700. The accounts payable balance of $9,280 consists of the $4,080 office supplies purchase and $5,200 in employee salaries yet to be paid.
d. The company’s rent expense, telephone expense, and miscellaneous expenses are paid in cash.
e. No cash has yet been collected on the $16,950 consulting revenue earned.
ERNST CONSULTING
Statement of Cash Flows
For Month Ended October 31
Cash flows from operating activities
Cash paid to employees
Cash paid for rent
Cash paid for telephone expenses
Cash paid for miscellaneous expenses
Net Cash used by operating activities
Cash flows from investing activities
Cash paid for office equipment
Net cash used by investing activities
Cash flows from financing activities
Cash investments from shareholders
Cash dividends to shareholders
Net cash provided by financing activities
Net increase in cash
Cash balance, October 1
Cash balance, October 31
