Chapter 01 – Financial Statements and Business Decisions
Solutions Chapter 1 – Set B Exercises – Libby 8e
E1-1B.
ABC COMPANY
Balance Sheet
For the Period ending December 31, 2014
(in millions of dollars)
Assets
Cash and cash equivalents
$ 377
Trade accounts, notes, and other receivables
2,262
Inventories
635
Investments
179
Net property, plant and equipment
7,626
Other assets
816
Total assets
$11,895
Liabilities
Accounts payable and other current liabilities
$ 3,322
Long-term debt
2,061
Other liabilities
3,393
Total liabilities
8,776
Stockholders’ Equity
Common stock
1,984
Retained earnings
1,135
Total stockholders’ equity
3,119
Total liabilities and stockholders’ equity
$11,895
E1-2B. UNIVERSITY MARKET
Income Statement
For the Month of March 2014
Revenues:
© 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for
sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
2
E1–3B.
Net Income (or Loss) = Revenues – Expenses
Assets = Liabilities + Stockholders’ Equity
A Net Income = $89,700 – $73,940 = $15,760;
E1–4B.
Net Income (or Loss) = Revenues – Expenses
Assets = Liabilities + Stockholders’ Equity
A Net Income = $230,820 – $176,700 = $54,120;
Stockholders’ Equity = $295,300 – $95,000 = $200,300.
© 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for
sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
3
E1–5B.
F
(1) Borrowed cash from a bank.
(I)
(2) Purchased stock in another company for cash.
(O)
(3) Paid the utility bill.
(O)
(4) Paid the property tax bill.
I
(5) Sold equipment for cash.
F
(6) Issued additional shares of stock for cash.
O
(7) Sales from customers received as cash.
X
(8) Sales from customers on credit (no cash).
E1–6B.
BARBARA’S DESIGN CORPORATION
Statement of Retained Earnings
For the Year Ended December 31, 2014
© 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for
sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
4
E1-7B.
FABULOUS STYLES
Income Statement
For the Month of March 2013
Revenues:
© 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for
sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
5
E1–8B.
Net Income (or Loss) = Revenues – Expenses
Assets = Liabilities + Stockholders’ Equity
A Net Income = $91,700 – $75,940 = $15,760;
E1–9B.
Net Income (or Loss) = Revenues – Expenses
Assets = Liabilities + Stockholders’ Equity
A Net Income = $240,820 – $176,700 = $64,120;
Stockholders’ Equity = $295,000 – $95,000 = $200,000.
© 2014 by McGraw-Hill Global Education Holdings, LLC. This is proprietary material solely for authorized instructor use. Not authorized for
sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
6
E1–10B. Christopher Corporation
Income Statement
For the Month of January 2014
Total revenues $400,000
Common stock 96,000