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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
