Chapter 01 – Introducing Financial Accounting
Problem 1-1A (Continued)
Part 3
Company C
First, calculate the beginning balance of equity:
Dec. 31, 2012
Assets …………………………………………………. $24,000
Liabilities …………………………………………….. ( 9,000)
Liabilities …………………………………………….. $29,000
Equity …………………………………………………. 26,875
Assets …………………………………………………. $55,875
Part 4
Company D
First, calculate the beginning and ending equity balances:
12/31/2012 12/31/2013
Problem 1-1A (Concluded)
Part 5
Company E
First, compute the balance of equity as of December 31, 2013:
Assets …………………………………………………. $113,000
Liabilities …………………………………………….. (70,000)
Problem 1-3A (15 minutes)
Elko Energy Company
Problem 1-4A (15 minutes)
Amity Company
Problem 1-5A (15 minutes)
ABM Company
Statement of Cash Flows
Problem 1-7A (60 minutes) Parts 1 and 2
Assets = Liabilities + Equity
Date
Cash
+
Accounts
Receivable
+
Office
Equipment
=
Accounts
Payable
+
Common
Stock
–
Dividends
+
Revenues
–
Expenses
May
1
+$40,000
=
+
$40,000
1
– 2,200
=
–
$2,200
3
+
$1,890
=
+ $1,890
5
– 750
`
=
–
750
8
+ 5,400
=
+
$5,400
12
+
$2,500
=
+
2,500
15
– 750
=
–
750
20
+ 2,500
–
2,500
=
22
+
3,200
=
+
3,200
25
+ 3,200
–
3,200
=
26
– 1,890
=
– 1,890
27
=
+ 80
–
80
28
– 750
=
–
750
30
– 300
=
–
300
30
– 280
=
–
280
31
– 1,400
=
–
$1,400
$42,780
+
$ 0
+
$1,890
=
$ 80
+
$40,000
–
$1,400
+
$11,100
–
$5,110
Problem 1-7A (Concluded)
Part 3—continued
The Graham Company
Statement of Cash Flows
For Month Ended May 31
Cash flows from operating activities
Cash received from customers …………………………..
$11,100
Cash paid for rent ………………………………………………
(2,200)
Cash paid for cleaning ……………………………………….
(750)
Cash paid for telephone …………………………………….
(300)
Cash paid for utilities …………………………………………
(280)
Cash paid to employees …………………………………….
(1,500)
Net cash provided by operating activities …………..
$ 6,070
Cash flows from investing activities
Purchase of equipment ………………………………………
(1,890)
Net cash used by investing activities ………………….
(1,890)
Cash flows from financing activities
Investment by stockholder …………………………………
40,000
Dividend to stockholder …………………………………….
(1,400)
Net cash provided by financing activities……………
38,600
Net increase in cash …………………………………………..
$42,780
Cash balance, May 1 ………………………………………….
0
Cash balance, May 31 ………………………………………..
$42,780
Problem 1-8A (Continued)
Part 3
Ander Electric
Income Statement
For Month Ended December 31
Revenues
Electrical fees earned …………………. $7,100
Expenses