SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 1-1
(a) $90,000 – $50,000 = $40,000 (Owner’s Equity).
(b) $44,000 + $70,000 = $114,000 (Assets).
(c) $94,000 – $53,000 = $41,000 (Liabilities).
BRIEF EXERCISE 1-2
(a) $120,000 + $232,000 = $352,000 (Total assets).
(b) $190,000 – $91,000 = $99,000 (Total liabilities).
(c) $800,000 – 0.5($800,000) = $400,000 (Owner’s equity).
BRIEF EXERCISE 1-3
(a) ($800,000 + $150,000) – ($300,000 – $60,000) = $710,000
(Owner’s equity).
(b) ($300,000 + $100,000) + ($800,000 – $300,000 – $70,000) =
$830,000
(Assets).
(c) ($800,000 – $80,000) – ($800,000 – $300,000 + $120,000) =
$100,000
(Liabilities).
BRIEF EXERCISE 1-4
Owner’s Equity
Assets
=
Liabilities
+
Owner’s
Capital
–
Owner’s
Drawings
+
Revenues
–
Expenses
(a)
X
=
$90,000
+
$150,000
–
$40,000
+
$450,000
–
$320,000
X
=
$90,000
+
$240,000
X
=
$330,000
(b)
$57,000
=
X
+
$25,000
–
$7,000
+
$52,000
–
$35,000
$57,000
=
X
+
$35,000
X
=
$22,000 ($57,000 – $35,000)
(c)
$600,000
=
($600,000 x 2/3)
+
X (Owner’s equity)
$600,000
=
$400,000
+
X
X
=
$200,000
BRIEF EXERCISE 1-5
A (a) Accounts receivable A (d) Supplies
L (b) Salaries and wages payable OE (e) Owner’s
capital
A (c) Equipment L (f) Notes
payable
BRIEF EXERCISE 1-6
