Financial and Managerial Accounting (Looseleaf) (Custom Package)
Financial and Managerial Accounting (Looseleaf) (Custom Package)
6th Edition
ISBN: 9781259754883
Author: Wild
Publisher: MCG
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Chapter 1, Problem 9E

a.

To determine

To compute: The value of equity.

a.

Expert Solution
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Explanation of Solution

Given,
The value of asset of A Company is $300,000 in the beginning of year
During the year asset increase $80,000.
The value of equity of A Company is $100,000 in the beginning of year.
The increase in liability of A Company is $50,000 during the year.

The formula to calculate equity is,

Equity=AssetsLiabilities

Substitute $380,000 for assets and $250,000 for liabilities,

Equity=$380,000$250,000 =$130,000

Hence, the equity of A Company is $130,000.

Working Notes:

Calculation of change in equity due to increase in assets and liability

Change in Equity=Change in AssetsChange in Liabilities =$80,000$50,000 =$30,000

Calculation of asset at the end of the year:

Asset at the end= Asset in the beggining+Addition during the year =$300,000+$80,000 =$380,000

Calculation of liabilities in the beginning of the year:
Liabilities in the beginning=( Asset in the beggining  Equity in the beginning ) =$300,000$100,000 =$200,000

Calculation of liabilities at the end of the year is:

Liabilities at the end= Liabilities in the beggining+Addition during the year =$200,000+$50,000 =$250,000

b.

To determine

To compute: The value of equity.

b.

Expert Solution
Check Mark

Explanation of Solution

Given,
The value of asset of O is $123,000.
The value of liabilities of O is $47,000

The formula to calculate equity is,

Equity=AssetsLiabilities

Substitute $123,000 for assets and $47,000 for liabilities.

Equity=$123,000$47,000 =$76,000

Hence, the equity of O is $130,000.

c.

To determine

To compute: Beginning and ending amount of equity

c.

Expert Solution
Check Mark

Explanation of Solution

Given,
The value of liability of Q Company is $70,000 in the beginning of year,
During the year liability decrease $5,000.
The value of asset of Q Company is $190,000 at the end of year
Increase of $60,000 during the year.

The formula to calculate equity is,

Equity=AssetsLiabilities

Beginning equity

Substitute $130,000 for assets in the beginning of year and $70,000 for liabilities in the beginning of year,

Equity=$130,000$70,000 =$60,000

Ending equity

Substitute $190,000 for asset at the end and $65,000 for liabilities at the end in the above equation,

Equity=$190,000$65,000 =$125,000

Hence, the value of equity of the Q Company in the beginning of the year is $60,000 and at the end is $125,000

Working Notes:

Calculate value of asset in the beginning of year:

Asset in the beggining= Asset at the endAddition during the year =$190,000$60,000 =$130,000

Calculation of change in equity due to increase in assets and liability

Change in Equity=Increase in Assets+Decrease in Liabilities =$60,000+$5,000 =$65,000

Calculation of Value of liabilities at the end is:

Liabilities at the end= Liabilities in the begginingDecrease during the year =$70,000$5,000 =$65,000

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Chapter 1 Solutions

Financial and Managerial Accounting (Looseleaf) (Custom Package)

Ch. 1 - Describe the internal role of accounting for...Ch. 1 - 7. Identify three types of services typically...Ch. 1 - Prob. 8DQCh. 1 - Prob. 9DQCh. 1 - 10. What are some accounting-related professions? 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 - Applying the accounting equation A1 Total assets...Ch. 1 - Applying the accounting equation A1 Use the...Ch. 1 - Prob. 9QSCh. 1 - Identifying effects of transactions using...Ch. 1 - Identifying effects of transactions using...Ch. 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 - Exercise 1-8 Using the accounting equation A1...Ch. 1 - Exercise 1-9 Using the accounting equation...Ch. 1 - Prob. 10ECh. 1 - Prob. 11ECh. 1 - Prob. 12ECh. 1 - Exercise 1-13 Identifying effects of transactions...Ch. 1 - Prob. 14ECh. 1 - Prob. 15ECh. 1 - Prob. 16ECh. 1 - Exercise 1-17 preparing a balance sheet P2 Use the...Ch. 1 - Prob. 18ECh. 1 - Prob. 19ECh. 1 - Prob. 20ECh. 1 - Prob. 21ECh. 1 - Prob. 1PSACh. 1 - Prob. 2PSACh. 1 - Prob. 3PSACh. 1 - Prob. 4PSACh. 1 - Prob. 5PSACh. 1 - Prob. 6PSACh. 1 - Prob. 7PSACh. 1 - Prob. 8PSACh. 1 - Prob. 9PSACh. 1 - Prob. 10PSACh. 1 - Prob. 11PSACh. 1 - Prob. 12PSACh. 1 - Prob. 13PSACh. 1 - Prob. 14PSACh. 1 - Prob. 1PSBCh. 1 - Prob. 2PSBCh. 1 - Prob. 3PSBCh. 1 - Prob. 4PSBCh. 1 - Prob. 5PSBCh. 1 - Prob. 6PSBCh. 1 - Prob. 7PSBCh. 1 - Prob. 8PSBCh. 1 - Prob. 9PSBCh. 1 - Prob. 10PSBCh. 1 - Prob. 11PSBCh. 1 - Prob. 12PSBCh. 1 - Prob. 13PSBCh. 1 - Prob. 14PSBCh. 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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