15 Minutes, Medium
Owners’
Assets = Equity
Office Notes
A
ccounts Capital
Cash + Equipment
+
Building + Land = Payable + Payable + Stock
December 31 balances 37,000$ 51,250$ 125,000$ 95,000$ 80,000$ 28,250$ 200,000$
(1) 35,000 35,000
Balances 72,000$ 51,250$ 125,000$ 95,000$ 80,000$ 28,250$ 235,000$
(2) (22,500) 55,000 35,000 67,500
MAXWELL COMMUNICATION
S
Liabilities +
PROBLEM 2.3
A
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
$
$
15 Minutes, Medium
Owners’
Assets = Equity
A
ccounts Office Notes
A
ccounts Capital
Cash + Receivable + Equipment
+
Trucks = Payable + Payable + Stock
December 31 balances 9,500$ 13,900$ 3,800$ 68,000$ 20,000$ 10,200$ 65,000$
(1) (2,700) 2,700
Balances 6,800$ 13,900$ 6,500$ 68,000$ 20,000$ 10,200$ 65,000$
(2) 4,000 (4,000)
PHILLIPS TRUCK RENTA
L
Liabilities +
PROBLEM 2.4
A
$
$
$
$
$
$
$
20 Minutes, Medium
a.
Liabilities & Owners’ Equity
Cash * 22,520$ Liabilities:
Notes receivable 9,500 Notes payable 180,000$
PROBLEM 2.5
A
HERE COME THE CLOWNS!
HERE COME THE CLOWNS!
Balance Sheet
June 30, 2015
Assets
20 Minutes, Medium
a.
Liabilities & Owners’ Equity
Cash 16,710$ Liabilities:
Accounts receivable 22,365 Notes payable 330,000$
PROBLEM 2.6
A
A
LEXANDER FARMS
,
INC
.
September 30, 2015
Assets
ALEXANDER FARMS, INC.
Balance Sheet
a.
Liabilities & Owners’ Equity
Cash 6,940$ Liabilities:
Accounts receivable 11,260 Notes payable 74,900$
b.
Liabilities & Owners’ Equity
Cash 14,490$ Liabilities:
Accounts receivable 11,260 Notes payable 74,900$
Supplies 8,250 Accounts payable 7,200
51,700 Salaries payable 8,900
PROBLEM 2.7
A
FRANKLIN BAKER
Y
35 Minutes, Medium
FRANKLIN BAKERY
Balance Sheet
August 1, 2015
Assets
FRANKLIN BAKERY
Balance Sheet
August 3, 2015
*Retained earnings ($40,700) = Total assets ($220,700), less total liabilities ($100,000) and capital stock
($80,000).
Assets
Equipment & fixtures
Cash flows from operating activities:
(16,200)$
(1,250)
Cash used in operating activities: (17,450)$
c.
Statement of Cash Flows
For the Period August 1-3, 2015
Franklin Bakery is in a stronger financial position on August 3 than it was on August 1.
Cash payment of accounts payable
Cash purchase of supplies
Cash flows from investing activities:
PROBLEM 2.7
A
FRANKLIN BAKERY
(
concluded
)
FRANKLIN BAKERY
On August 1, the highly liquid assets (cash and accounts receivable) total only $18,200, but the
a.
Liabilities & Owners’ Equity
Cash 7,400$ Liabilities:
Accounts receivable 1,250 Notes payable * 70,000$
Supplies 3,440 Accounts payable 8,500
b.
Liabilities & Owners’ Equity
Cash 29,400$ Liabilities:
Balance Sheet
October 6, 2015
Assets
THE SODA SHOP
Balance Sheet
September 30, 2015
Assets
PROBLEM 2.8
A
THE SODA SHO
P
40 Minutes, Strong
THE SODA SHOP
*Total assets, $132,590 less owners’ equity, $54,090 less accounts payable, $8,500, equals notes payable.
Cash flows from operating activities:
5,500$
Cash paid for expenses (4,000)
Cash paid for accounts payable (8,500)
(1,000)
(8,000)$
PROBLEM 2.8
A
THE SODA SHOP
(
concluded
)
THE SODA SHOP
Statement of Cash Flows
For the Period October 1-6, 2015
Cash received from revenues
Cash paid for supplies
Cash flows from investing activities:
Cash used in operating activities
a
.
Liabilities & Owner’s Equity
Cash 16,900$ Liabilities:
Accounts receivable 7,200 Notes payable 15,000$
Props and costumes 18,000 Accounts payable 3,900
b. (1)
(
2
)
(
)
(
)
Only the amount receivable from Artistic Tours ($7,200) should be included in the company’s
The cash in Anita Spencer’s personal savings account is not an asset of the business entity
Spencer
$16,900.
PROBLEM 2.9
A
SPENCER PLAYHOUS
E
35 Minutes, Strong
SPENCER PLAYHOUSE
Balance Sheet
September 30, 2015
Assets
(8)
(9)
PROBLEM 2.9
A
Owner’s equity is not valued at either the original amount invested or at the estimated market
value of the business. In fact, owner’s equity cannot be valued independently of the amounts
The amount owed to stagehands for work done through September 30 is the result of completed
SPENCER PLAYHOUSE
(
concluded
)