Loose Leaf for Fundamental Accounting Principles
Loose Leaf for Fundamental Accounting Principles
23rd Edition
ISBN: 9781259687709
Author: John J Wild, Ken Shaw Accounting Professor, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
Question
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Chapter 1, Problem 7BPSB
To determine

Concept Introduction:

Financial Statements: Financial statements are reports of the financial condition of a company or entity. In the financial statements, the management presents the financial performance and position of the company at a point in time. Financial statements disclose the financial effects of business transactions. Financial statements include a balance sheet, income statement, statement of cash flows and statement of change in equity.

Balance Sheet: The balance sheet provides details of the firm’s assets, liabilities and owner’s equity for a given date. The balance sheet gives a snapshot of what the company owns and owes as well as the amount invested in equity. The balance sheet follows the below rule

Assets = Liabilities + equity

Income Statement: It is also called the profit & loss statement. Income statement provides a snapshot of revenue, expenses and net income of the organization for a given period.

Statement of Cash Flows: It is a financial statement that shows the movements of cash and bank balance during a period. It describes the amount of cash generated by a company during a period and the use of the cash.

Statement of change in equity: It is a financial statement that shows the movements of equity capital during a period.

1.

To prepare: A table in required format for the given data

Expert Solution
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Explanation of Solution

The required table for the given data is prepared as below:

 
  Assets   Liabilities + Equity
Date Cash + Account Receivable + Equipment = Account Payable + N. Niko Capital - N. Niko withdrawals + Revenues - Expenses
1 $130,000               $130,000            
2 -6,000                           -6,000
4         2,400   2,400                
6 -1,150                           -1,150
8 850                       850    
14     7,500                   7,500    
16 -800                           -800
20 7,500   -7,500                        
21     7,900                   7,900    
24     675                   675    
25 7,900   -7,900                        
26 -2,400           -2,400                
28 -800                           -800
29 -4,000                   -4,000        
30 -150                           -150
30 -890                           -890
  130,060 + 675 + 2,400 = 0 + 130,000 - -4,000 + 16,925 - -9,790

2.

To determine

To Prepare: The income statement, statement of owner’s equity and the balance sheet from the given data.

Expert Solution
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Explanation of Solution

The income statement for Niko’s Maintenance Co for June month is as below.

Niko’s Maintenance Co
Income Statement for the month June
  Details   Amount in $
  Revenue    
  Income from maintain services   $16,925
       
  Expenses    
  Rent expenses 6,000  
  Administrative expenses 1,150  
  Salary expenses 1,600  
  Telephone bill 150  
  Utilities expenses 890 9,790
       
  Net income   $7,135

The statement of owner’s equity for Niko’s Maintenance Co for the month of June is as below

Niko’s Maintenance Co
Statement of owner’s equity for the month of June
  Details Amount in $
  Opening equity 0
  Add: Equity introduced in form of cash 130,000
  Add: Net income for the year 7,135
  Less: Cash withdrawals -4,000
     
  Closing equity as on June 30 $133,135

The balance sheet as of June 30 is as below.

Niko’s Maintenance Co
Balance Sheet as on June 30
  Details Amount in $
  Liabilities  
  Equity $133,135
  Account payable 0
  Total $133,135
     
  Assets  
  Cash $130,060
  Account receivable $675
  Equipments $2,400
     
  Total $133,135

3.

To determine

To Prepare: A statement of cash flows for the month of June.

Expert Solution
Check Mark

Explanation of Solution

The statement of cash flows for the month of June is prepared as below.

Niko’s Maintenance Co
Statement of Cash flow for the month of June
      Amount in $
  Opening cash balance   0
  Cash flow from operating activities    
  Rent paid in cash -6,000  
  Advertising exp paid in cash -1,150  
  Revenue received in cash 850  
  Cash received from customer 7,500  
  Cash received from customer 7,900  
  Salary paid in cash -1,600  
  Telephone bill paid in cash -150  
  Utilities expenses paid in cash -890 6460
       
  Cash flow from financing activities    
  Cash paid to supplier of equipment   -2,400
       
  Cash flow from investing activities    
  Cash received from Owner 130,000  
  Cash withdrawals by owner -4,000 126,000
       
  Cash Balance as on June 30   130,060

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Chapter 1 Solutions

Loose Leaf for Fundamental Accounting Principles

Ch. 1 - Prob. 11DQCh. 1 - Prob. 12DQCh. 1 - Prob. 13DQCh. 1 - Prob. 14DQCh. 1 - Prob. 15DQCh. 1 - Prob. 16DQCh. 1 - Prob. 17DQCh. 1 - Prob. 18DQCh. 1 - Prob. 19DQCh. 1 - Prob. 20DQCh. 1 - Prob. 21DQCh. 1 - Prob. 22DQCh. 1 - Prob. 23DQCh. 1 - Prob. 24DQCh. 1 - Prob. 25DQCh. 1 - Prob. 26DQCh. 1 - Prob. 27DQCh. 1 - Define and explain return on assets.Ch. 1 - Prob. 29DQCh. 1 - Prob. 30DQCh. 1 - Prob. 31DQCh. 1 - Prob. 32DQCh. 1 - Prob. 33DQCh. 1 - Prob. 1QSCh. 1 - Prob. 2QSCh. 1 - Prob. 3QSCh. 1 - Prob. 4QSCh. 1 - Prob. 5QSCh. 1 - Prob. 6QSCh. 1 - Prob. 7QSCh. 1 - Prob. 8QSCh. 1 - Prob. 9QSCh. 1 - Prob. 10QSCh. 1 - Prob. 11QSCh. 1 - Prob. 12QSCh. 1 - Prob. 13QSCh. 1 - Prob. 14QSCh. 1 - Prob. 15QSCh. 1 - Prob. 16QSCh. 1 - Prob. 17QSCh. 1 - Prob. 1ECh. 1 - Prob. 2ECh. 1 - Prob. 3ECh. 1 - Prob. 4ECh. 1 - Prob. 5ECh. 1 - Prob. 6ECh. 1 - Prob. 7ECh. 1 - Prob. 8ECh. 1 - Prob. 9ECh. 1 - Prob. 10ECh. 1 - Prob. 11ECh. 1 - Prob. 12ECh. 1 - Prob. 13ECh. 1 - Prob. 14ECh. 1 - Prob. 15ECh. 1 - Exercise 1–16 Preparing a statement of owner’s...Ch. 1 - Prob. 17ECh. 1 - Prob. 18ECh. 1 - Prob. 19ECh. 1 - Prob. 20ECh. 1 - Prob. 21ECh. 1 - Prob. 22ECh. 1 - Prob. 1APSACh. 1 - Prob. 2APSACh. 1 - Prob. 3APSACh. 1 - Prob. 4APSACh. 1 - Prob. 5APSACh. 1 - Prob. 6APSACh. 1 - Prob. 7APSACh. 1 - Prob. 8APSACh. 1 - Prob. 9APSACh. 1 - Prob. 10APSACh. 1 - Prob. 11APSACh. 1 - Problem 1–12AA Identifying risk and...Ch. 1 - Prob. 13APSACh. 1 - Prob. 14APSACh. 1 - Prob. 1BPSBCh. 1 - Prob. 2BPSBCh. 1 - Prob. 3BPSBCh. 1 - Prob. 4BPSBCh. 1 - Prob. 5BPSBCh. 1 - Prob. 6BPSBCh. 1 - Prob. 7BPSBCh. 1 - Prob. 8BPSBCh. 1 - Prob. 9BPSBCh. 1 - Prob. 10BPSBCh. 1 - Prob. 11BPSBCh. 1 - Prob. 12BPSBCh. 1 - Prob. 13BPSBCh. 1 - Prob. 14BPSBCh. 1 - Prob. 1SPCh. 1 - Prob. 1BTNCh. 1 - Prob. 2BTNCh. 1 - Prob. 3BTNCh. 1 - Prob. 4BTNCh. 1 - Prob. 5BTNCh. 1 - Prob. 6BTNCh. 1 - Prob. 7BTNCh. 1 - Prob. 8BTNCh. 1 - Prob. 9BTN
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