(a)
It is a vital element in recording the effects of financial activities in a business. The
The balance sheet is prepared using accounting equation in vertical form. Also, the balance on assets side must be equal to sum of balances of liabilities and
Stockholder's equity of company A as of December 31, 20Y7
Answer to Problem 2.5E
The stockholders' equity of Company A as of December 31, 20Y7 is $825000.
Explanation of Solution
Computation of stockholders' equity as of December 31, 20Y7:
In
(b)
Accounting Equation:
It is a vital element in recording the effects of financial activities in a business. The balance sheet also known as statement of financial condition is expressed in the accounting equation as:
The balance sheet is prepared using accounting equation in vertical form. Also, the balance on assets side must be equal to sum of balances of liabilities and stockholder's equity.
Stockholders' equity of company A as of December 31, 20Y8, when assets increased by $150000 and liabilities increased by $80000 during 20Y8.
Answer to Problem 2.5E
The stockholders' equity of Company A as of December 31, 20Y8 is $895000.
Explanation of Solution
Computation of Assets as of December 31, 20Y8:
Computation of liabilities of Company A as of December 31, 20Y8:
Computation of stockholders' equity of company a as of December 31, 20Y8:
In accounting equation,
(c)
Accounting Equation:
It is a vital element in recording the effects of financial activities in a business. The balance sheet also known as statement of financial condition is expressed in the accounting equation as:
The balance sheet is prepared using accounting equation in vertical form. Also, the balance on assets side must be equal to sum of balances of liabilities and stockholder's equity.
Stockholders' equity of company A as of December 31, 20Y8, when assets decreased by $200000 and liabilities increased by $100000 during 20Y8.
Answer to Problem 2.5E
The stockholders' equity of Company A as of December 31, 20Y8 is $525000.
Explanation of Solution
Computation of Assets as of December 31, 20Y8:
Computation of liabilities of Company A as of December 31, 20Y8:
Computation of stockholders' equity of company a as of December 31, 20Y8:
In accounting equation,
(d)
Accounting Equation:
It is a vital element in recording the effects of financial activities in a business. The balance sheet also known as statement of financial condition is expressed in the accounting equation as:
The balance sheet is prepared using accounting equation in vertical form. Also, the balance on assets side must be equal to sum of balances of liabilities and stockholder's equity.
Stockholders' equity of company A as of December 31, 20Y8, when assets increased by $400000 and liabilities decreased by $75000 during 20Y8.
Answer to Problem 2.5E
The stockholders' equity of Company A as of December 31, 20Y8 is $1300000.
Explanation of Solution
Computation of Assets as of December 31, 20Y8:
Computation of liabilities of Company A as of December 31, 20Y8:
Computation of stockholders' equity of company a as of December 31, 20Y8:
In accounting equation,
(e)
Accounting Equation:
It is a vital element in recording the effects of financial activities in a business. The balance sheet also known as statement of financial condition is expressed in the accounting equation as:
The balance sheet is prepared using accounting equation in vertical form. Also, the balance on assets side must be equal to sum of balances of liabilities and stockholder's equity.
Net income (or net loss) during 20Y8, when assets and liabilities were $1275000 and $290000, respectively (there were no dividends and no additional common stock issued).
Answer to Problem 2.5E
The net income of company A as of December 31, 20Y8 is $160000/
Explanation of Solution
Computation of stockholders' equity as of December 31, 20Y7:
In accounting equation,
Assuming retained earnings is nil as of December 31, 20Y7,
Computation of Stockholders' equity as of December 31, 20Y8:
In accounting equation,
Assuming no additional common stock during year 20Y8,
Common stock during Year 20Y8 = $825000
Computation of Net income as of year ending December 31, 20Y8:
Want to see more full solutions like this?
Chapter 2 Solutions
Survey of Accounting (Accounting I)
- Assume that as of January 1, 20Y8, Sylvester Con- suiting has total assets of $500,000 and total assets of $150,000. As of December 31, 20Y8, Sylvester has total liabilities of $200,000 and total stockholders’ equity of $400,000. (a) What was Sylvester’s stockholders’ equity as of January 1, 20Y8? (b) Assume that Sylvester did not pay any dividends during 20Y8. What was the amount of net income for 20Y8?arrow_forwardThe income statement, statement of retained earnings, and balance sheet for Somerville Company are as follows: Includes both state and federal taxes. Brief Exercise 15-20 Calculating the Average Common Stockholders Equity and the Return on Stockholders Equity Refer to the information for Somerville Company on the previous pages. Required: Note: Round answers to four decimal places. 1. Calculate the average common stockholders equity. 2. Calculate the return on stockholders equity.arrow_forwardAccounting equation Inspiring U is a motivational consulting business. At the end of its accounting period, December 31, 2012, Inspiring U has assets of $746,000 and liabilities of $179,000. Using the accounting equation, determine the following amounts: a. Stockholders' equity as of December 31, 2012. $$ 567,000 b. Stockholders' equity as of December 31, 20Y3, assuming that assets increased by $142,000 and liabilities increased by $43,000 during 2013. Xarrow_forward
- ACCOUNTING Carry out the following practical case: The company “Inversiones San Remo SAC”, with RUC: 20234125239, began activities in 2005, is dedicated to the manufacture of curtains, operates in its own premises located in La Victoria, has 33 employees (monthly average), and According to the General Shareholders' Meeting, in 2018 they calculated the dividend distribution of 40%. They request to assemble the Financial Statements with the following information: Prepare the Statement of Financial Position 2017 and 2018. Notes to the Financial Statements: Selling expenses correspond to depreciation expenses for 2018. Administrative expenses corresponding to payroll expenses (salaries) for the 2018 financial year. Financial income corresponds to earnings from the profitability of cash surpluses that the company had in the 2018 period. Financial expenses for the 2018 period correspond to interest paid on working capital loans. Make all the discounts by law that you consider for…arrow_forwardBeginning Required Information (The following information applies to the questions displayed below The annual report for Malibu Beachwear reported the following transactions affecting stockholders' equity. 3. Prepare a statement of stockholders' equity, assuming the following opening balances. Net income for the $283,000. a Purchased $351,300 of common stock now held in treasury. b Declared cash dividends in the amount of $260,650. c. Paid the dividends in (b). d. Issued 113,000 new shares of $0.10 par value common shares for $2 per share. e. Closed the Dividends account. Ending Stock Issuances Net Income Dividends: Common Additional Paid- In Capita 13,150 $ 196,500 $ Common Stock $ Retained Earnings Treasury Stock 151,300 $ 283,000 0arrow_forwarda. a. Analyze each transaction above by showing its effects on the accounting equation-specifically, identify the accounts and amounts (including + or -) for each transaction. b. C. Required information [The following information applies to the questions displayed below.] C. a. On March 22, purchased 880 shares of RPI Company stock at $24 per share. Duke's stock investment results in it having an insignificant influence over RPI. b. On July 1, received a $3 per share cash dividend on the RPI stock purchased in part a. c. On October 8, sold 440 shares of RPI stock for $34 per share. Assets = = = = = = Liabilities + + + + + + Equityarrow_forward
- Stockholders' equity The right side of the balance sheet shows the firm’s liabilities and stockholders’ equity. Which of the following best describes shareholders’ equity? Equity is the initial claim on value of the assets before the firm pays off its liabilities. Equity is the difference between the company’s assets and liabilities. NOW Inc. released its annual results and financial statements. Grace is reading the summary in the business pages of today’s paper. In its annual report this year, NOW Inc. reported a net income of $148 million. Last year, the company reported a retained earnings balance of $476 million, whereas this year it increased to $560 million. How much was paid out in dividends this year? $64 million $232 million $325 million $4 millionarrow_forwardACCOUNTING Carry out the following practical case: The company “Inversiones San Remo SAC”, with RUC: 20234125239, began activities in 2005, is dedicated to the manufacture of curtains, operates in its own premises located in La Victoria, has 33 employees (monthly average), and According to the General Shareholders' Meeting, in 2018 they calculated the dividend distribution of 40%. They request to assemble the Financial Statements with the following information: Prepare the 2018 Income Statement. Prepare the Statement of Financial Position 2017 and 2018. Statement of Cash Flow for the year 2018. Direct method Perform the acid test calculation, the two periods and explain what the results found mean Notes to the Financial Statements: Selling expenses correspond to depreciation expenses for 2018. Administrative expenses corresponding to payroll expenses (salaries) for the 2018 financial year. Financial income corresponds to earnings from the profitability of cash surpluses that…arrow_forwardStockholders' equity The right side of the balance sheet shows the firm’s liabilities and stockholders’ equity. Which of the following best describes shareholders’ equity? Equity is the initial claim on value of the assets before the firm pays off its liabilities. Equity is the difference between the company’s assets and liabilities. NOW Inc. released its annual results and financial statements. Grace is reading the summary in the business pages of today’s paper. In its annual report this year, NOW Inc. reported a net income of $148 million. Last year, the company reported a retained earnings balance of $476 million, whereas this year it increased to $560 million. How much was paid out in dividends this year? $64 million $232 million $325 million $4 million Accounting statements represent a company’s earnings, but this is not the real cash that a company generates. Earnings data can be manipulated and can be deceiving. Thus,…arrow_forward
- The following is the statement of stockholders' equity for Cloud Computer Service Company: Cloud Computer Service Company Statement of Stockholders' Equity For the Year Ended December 31, 2018 Common Stock Totals Balances, January 1, 20Y8 $50,000 $67,068 ??? Net income (5,000) Dividends Balances, December 31, 20Y8 $50,000 $68,905 Calculate the net income to complete the statement. O a. $6,837 O b. $8,137 O c. $6,637 O d. $1,837 Retained Earnings $17,068 ??? (5,000) $18,905arrow_forwardAccounting equationInspirational Inc. is a motivational consulting business. At the end of itsaccounting period, October 31, 2017, Inspirational has assets of$5,250,000 and liabilities of $1,600,000. Using the accounting equationand considering each case independently, determine the followingamounts: . A. Stockholders' equity as of October 31, 2017.. B. Stockholders' equity as of October 31, 2018, assuming that assetsincreased by$800,000 and liabilities increased by $330,000 during2018.. C. Stockholders' equity as of October 31, 2018, assuming that assets decreased by $600,000 and liabilities increased by $140,000 during2018.. D. Stockholders' equity as of October 31, 2018, assuming that assetsincreased by $440,000 and liabilities decreased by $90,000 during2018, . E. Net income (or net loss) during 2018, assuming that as ofOctober 31, 2018, assets were $6, 140,000, liabilities were$1,950,000, and no additional common stock was issued ordividends paid.arrow_forwardplease complete using word The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020 and that Mulatto Company’s charter will authorize 1,000,000 shares of common stock and 400,000, $100 par value, 5% cumulative preferred stock. They have asked each student from your accounting course to prepare the company’s journal entries and statement of owner’s equity based on the following information which is grouped according to your surname name initial. (Hint!!!! Example surname Manuel will use the initial M and that person should only use the info presented in line with the heading with their surname initial. You are not allowed to use info associated other initials other than that of your own as this will result in the forfeiture of the grade.) Issued 45,500 shares of common stock. Stock has par value of 0.30per share and was issued at $ 30.00…arrow_forward
- Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage LearningSurvey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning