Name: ____________________________________ Date: ________________
Chapter 1 Homework
•The liabilities of Daley Company are $92,040and the stockholders’ equity is
$243,800. What is the amount of Daley Company’s total assets?
•HINT: Assets = liability + equity
ANSWER: Asset = liabilities + equity
Total Assets: $92,040 + $243,800=$335,840
•At the beginning of the year, Peale Company had total assets of $833,300and total
liabilities of $508,800. If total assets increased $174,600during the year and total
liabilities decreased $86,000, what is the amount of stockholders’ equity at the end
of the year?
•ANSWER:
Asset = Liability + Stockholder’s equity
Stockholder’s equity = asset – liability
Stockholders’ equity = ($833,300+ $174,600) – ($508,800–$86,000) =$585,100
•Indicate whether each of these items is an asset, a liability, or part of
stockholders’ equity.
•Accounts receivable
•Salaries and wages payable
•Equipment
•Supplies
•Common stock
•Notes payable
•ANSWER:
•Asset
•Liability
•Asset
•Asset
•Stockholder’s equity
•Liability
•During 2014, Gavin Corp. entered into the following transactions. Show the effect
of each transaction on the accounting equation:
•$8,730cash dividend to stockholders
•Borrowed $59,070by issuing bonds.
•Purchased supplies on account for $3,560.
•ANSWER:
•
•
•
•
•Match each of the following forms of business organization with a set of
characteristics: sole proprietorship, partnership, corporation
•Shared control, tax advantages, increased skills and resources.
•Simple to set up and maintains control with founder.
•Easier to transfer ownership and raise funds, no personal liability
•ANSWER:
•Partnership
•Sole proprietorship
•Corporation