FUND.ACCT.PRIN -ONLINE ONLY  >I<
FUND.ACCT.PRIN -ONLINE ONLY >I<
22nd Edition
ISBN: 9780077632878
Author: Wild
Publisher: MCG
Question
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Chapter 1, Problem 9APSA
To determine

Concept introduction:

Account Payables: For delivered goods or services, the cash owed by the business that they are required to pay to their suppliers is called the account payables. In the balances sheet, the account payables are shown as liabilities.

Account Receivables: For delivered goods or services, the cash owed by the customer that they need to pay to the business is called account payables. In the balances sheet, the account payables are shown as assets.

Asset: A resource which will generate a cash flow in a future for an individual, company or corporation. It has an economic value and helps to reduce expenses, benefits the firm’s operations and improve sales. Asset is mentioned on the credit side of the balance sheet.

Liabilities: During the course of the business operations, an obligation or the company’s debit that arises is known as liability. Liabilities such as mortgages, accounts payables, accrued expenses and loans are recorded on the right hand side of the balance sheet.

Equity: Equity is the value of an asset less the amount of all liabilities on that asset. It can be represented with the accounting equation: Assets -Liabilities = Equity.

Income Statement: The statement in which the profit and loss of a company is mentioned is called the income statement. In the income statement the revenues, expenses, net income, profit and loss will be mentioned. It is also a statement which gives us the effect of expenses and profit in a stipulated time period.

1. To write: The statement showing addition and subtraction of each transaction for the month of Dec.

                                  Assets = Liability + Equity
Date Cash Account receivable Office suppliers Office equipment Electrical equipment Accounts payable S.Sony capital S.Sony withdrawals Revenues Expenses
Dec.1 $65,000           $65,000      
Balance $65,000           $65,000      
Dec.2 ($1,000)                 $1,000
Balance $64,000           $65,000     $1,000
Dec.3 ($4,800)       $13,000 $8,200        
Balance $59,200       $13,000 $8,200 $65,000     $1,000
Dec.5 ($ 800)   $800              
Balance $58,400   $800   $13,000 $8,200 $65,000     $1,000
Dec.6 $ 1,200               $1,200  
Balance $59,600   $800   $13,000 $8,200 $65,000   $1,200 $1,000
Dec.8       $2,530   $2,530        
Balance $59,600   $800 $2,530 $13,000 $10,730 $65,000   $1,200 $1,000
Dec.15   $5,000             $5,000  
Balance $59,600 $5,000 $800 $2,530 $13,000 $10,730 $65,000   $6,200 $1,000
Dec.18     $350     $ 350        
Balance $59,600 $5,000 $1,150 $2,530 $13,000 $11,180 $65,000   $6,200 $1,000
Dec.20 ($2,530)         ($2,530)        
Balance $57,070 $5,000 $1,150 $2,530 $13,000 $8,550 $65,000   $6,200 $1,000
Dec.24   $ 900             $ 900  
Balance $57,070 $5,900 $1,150 $2,530 $13,000 $8,550 $65,000   $7,100 $1,000
Dec.28 $5,000 ($5,000)                
Balance $62,070 $900 $1,150 $2,530 $13,000 $8,550 $65,000   $7,100 $1,000
Dec.29 ($1,400)                 $1,400
Balance $60,670 $900 $1,150 $2,530 $13,000 $8,550 $65,000   $7,100  
Dec.30 ($ 540)                 $ 540
Balance $60,130 $900 $1,150 $2,530 $13,000 $8,550 $65,000   $7,100  
Dec.31 ($ 950)             $950    
Balance $59,180 $900 $1,150 $2,530 $13,000 $8,550 $65,000 $950 $7,100 $2,940

2. To write: The income statement, owner’s equity and the balance sheet for the month of Dec.

Expert Solution
Check Mark

Explanation of Solution

Particulars   Amount
Revenue   $7,100
Total Revenues (A)   $7,100
     
Salaries expense   $1,400
Rental expense   $1,000
Selling and administrative expense   $540
Total Expense (B)   $2,940
Net Income (A-B)   $4,160
     

Owners Equity account for the month of Dec

Particulars Amount Amount
Owners Capital    
Opening Capital $0  
Add: Invested during the year $65,000  
Add: Profit during the year $4,160  
  $69,160  
     
Less: A. Armani Withdrawals $950 $68,210

Balance Sheet for the month of Dec

Particulars Amount Amount
Owners Capital   $68,210
     
Current Liabilities    
Accounts Payable   $8,550
     
Total   $76,760
     
Fixed Assets    
Electrical Equipment   $13,000
Office Supplies   $1,150
Office Equipment   $2,530
Current Assets    
Accounts Receivable   $900
     
     
Cash   $59,180
     
Total   $76,760
To determine

3. To write: The cash flow for the month of Dec.

Expert Solution
Check Mark

Explanation of Solution

Particulars Amount Amount
Cash from operating activities    
Net Income from business operation $4,160  
Add: Increase in Trade payable $8,550  
Less: Increase in Trade receivable ($900) $11,810
Cash used by investing activities    
Purchase electrical equipment $13,000  
Purchase of Office Equipment $2,530  
Purchase of Office Supplies $1,150 ($16,680)
Cash from financing activities    
Capital Introduced $65,000  
Amount withdrawn $950 $64,050
Net Increase/(decrease) in cash   $59,180
Add: Opening Cash Balance as on Dec.31, 2016   $0
     
Closing Cash Balance as on Dec.31, 2017   $59,180
To determine

4. To write: Total assets, total liabilities and equity change by the end of this month

Expert Solution
Check Mark

Explanation of Solution

Instead of $65,000 cash introduced by owner if $49,000 invested and Sony electronics borrowed $16,000 from bank.

(a) No change in total Assets.

(b) Total liabilities will increase by $16,000 so total liabilities will be $16,000+$8,550 = $24,550.

(c) Total Equity will be decreased by $16,000 so Total Equity will be $68,210-$16,000 = $52,210

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Chapter 1 Solutions

FUND.ACCT.PRIN -ONLINE ONLY >I<

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. 34DQCh. 1 - Prob. 35DQCh. 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 - Classify each of the following items as assets...Ch. 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 - ( Provide an example of a transaction that...Ch. 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. 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 - Prob. 12APSACh. 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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