Problem 1-2B (Continued)
Part 3
Company X
First, calculate the beginning and ending equity balances:
12/31/2014 12/31/2015
Assets………..…………….... $141,500 $186,500
Then, find the amount of investments by owner during 2015 as follows:
Equity, December 31, 2014………….…………….... $ 73,000
Plus stock issuances..………………………..……… ?
Plus net income…………………..…….…….….…….. 18,500
Thus, the owner’s investments must have been $ 29 ,200
Part 4
Company Y
First, calculate the beginning balance of equity:
Dec. 31, 2014
Assets………………..…………………..…………... $92,500
Equity……………………..……….………..……….. $41 ,000
Next, find the ending balance of equity as follows:
Equity, December 31, 2014…..…….………... $41,000
Plus stock issuances…………………………... 48,100
Plus net income……………………………….….. 24,000
Equity, December 31, 2015…..…….………... $93 ,100
Finally, find the ending amount of assets by adding the ending balance of
equity to the ending balance of liabilities:
Dec. 31, 2015
Liabilities………………………………………..…… $ 42,000
Equity……………………..……….………..……….. 93 ,100
Problem 1-2B (Concluded)
Part 5
Company Z
First, calculate the balance of equity as of December 31, 2015:
Assets………………..…………………..…………... $170,000
Next, find the beginning balance of equity as follows:
Equity, December 31, 2014…..…….………... $ ?
Plus stock issuances…………………………... 60,000
Plus net income……………………………….….. 32,000
Finally, find the beginning amount of liabilities by subtracting the beginning
balance of equity from the beginning balance of assets:
Dec. 31, 2014
Assets………………..…………………..…………... $144,000
Problem 1-3B (15 minutes)
Safari Company
Balance Sheet
December 31, 2015
Assets………………..…..… $114,000 Liabilities………………………….. $ 64,000
Problem 1-4B (15 minutes)
Solar Company
Income Statement
For Year Ended December 31, 2015
Revenues ……………………………….….….…. $68,000
Problem 1-5B (15 minutes)
Audi Company
Statement of Retained Earnings
For Year Ended December 31, 2015
Retained earnings, Dec. 31, 2014 …............. $49,000
Add: Net income……………..…….…….……... 5 ,000
54,000
Problem 1-6B (15 minutes)
Banji Company
Statement of Cash Flows
For Year Ended December 31, 2015
Cash used by operating activities ….……............ $(3,000)
Cash from investing activities………………………… 1,600
Cash from financing activities….…….……….…..... 1 ,800
Net increase in cash………………………………………. $ 400
Problem 1-7B (60 minutes) Parts 1 and 2
Assets = Liabilities + Equity
Date Cash +Accounts
Receivable +Equipment =Accounts
Payable +Common
Stock –Dividends +Revenues –Expenses
June 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 =
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Solutions Manual, Chapter 1 45
Problem 1-7B (Continued)
Part 3
Niko’s Maintenance Co.
Income Statement
For Month Ended June 30
Revenues
Maintenance services revenue…..….. $16,925
Expenses
Rent expense………………………………… $6,000
Salaries expense………………….….……. 1,600
Niko’s Maintenance Co.
Statement of Retained Earnings
For Month Ended June 30
Retained earnings, June 1………….……….….….. $ 0
Add: Net income………………………….……..…… 7 ,135
7,135
Niko’s Maintenance Co.
Balance Sheet
June 30
Assets Liabilities
Cash………………….…………$130,060 Accounts payable…….……….………$ 0
Accounts receivable…..... 675 Equity
Equipment……………......... 2,400 Common stock……………………….… 130,000
Problem 1-7B (Concluded)
Part 3—continued
Niko’s Maintenance Co.
Statement of Cash Flows
For Month Ended June 30
Cash flows from operating activities
Cash received from customers1……………………..…….. $ 16,250
Cash paid for rent………………..…………….………………… (6,000)
Cash paid for advertising……………………..….……….…. (1,150)
Cash paid for telephone………………..….…….….……….. (150)
Cash paid for utilities…………….……………………….……. (890)
Cash paid to employees……………………….….……….…. (1,600)
Net cash provided by operating activities….….……... $ 6,460
Problem 1-8B (60 minutes) Parts 1 and 2
Assets =Liabilities +Equity
Cash +Accounts
Receivable +Office
Supplies +Office
Equipment +Building =Accounts
Payable +Notes
Payable +Common
Stock –Dividends +Reve-
nues –Expen-
ses
a. + $90,000 + $10,000 + $100,000
b. – 40,000 + $150,000 + $110,000
Bal. 50,000 + 10,000 + 150,000 = 110,000 + 100,000
c. – 25,000 + 25,000
Bal. 25,000 + 35,000 + 150,000 = 110,000 + 100,000
d. + $1,200 + 1,700 + $2,900
Bal. 25,000 1,200 + 36,700 + 150,000 =2,900 + 110,000 + 100,000
e. – 750 –$ 750
Financial and Managerial Accounting, 6th Edition
48
Problem 1-8B (Concluded)
Part 3
The company’s net income = $6,800 – $3,250 = $3,550
Problem 1-9B (60 minutes) Parts 1 and 2
Assets = Liabilities + Equity
Date Cash +Accounts
Receivable +Office
Supplies +Office
Equipment +Roofing
Equipment =Accounts
Payable +Common
Stock –Dividends +Reve-
nues –Expen-
ses
July 1 + $80,000 = + $80,000
2– 700 –$700
Bal. 79,300 = 80,000 –700
3– 1,000 + $5,000 + $4,000
Bal. 78,300 + 5,000 = 4,000 + 80,000 –700
6– 600 + $ 600
Bal. 77,700 + 600 + 5,000 = 4,000 + 80,000 –700
8 + 7,600 + $7,600
Bal. 85,300 + 600 + 5,000 = 4,000 + 80,000 + 7,600 –700