Connect Homework Chapter 1

1. Use the accounting equation to compute the missing financial statement amounts.

2. Use the expanded accounting equation to compute the missing financial statement amounts.

Determine the missing amount from each of the separate situations given below.

a. At the beginning of the year, Addison Company's assets are $244,000 and its equity is $183,000. During the year, assets increase $80,000 and liabilities increase $41,000. What is the equity at year-end?

b. Office Store has assets equal to $209,000 and liabilities equal to $182,000 at year-end. What is the equity for Office Store at year-end?

c. At the beginning of the year, Quaker Company's liabilities equal $57,000. During the year, assets increase by $60,000, and at year-end assets equal $190,000. Liabilities decrease $12,000 during the year. What are the beginning and ending amounts of equity?

1. The company completed consulting work for a client and immediately collected $6,100 cash earned.
2. The company completed commission work for a client and sent a bill for $4,600 to be received within 30 days.
3. The company paid an assistant $1,700 cash as wages for the period.
4. The company collected $2,300 cash as a partial payment for the amount owed by the client in transaction b.
5. The company paid $820 cash for this period's cleaning services.

1. The owner (Alex Carr) invested $18,200 cash in the company.
2. The company purchased supplies for $1,300 cash.
3. The owner (Alex Carr) invested $11,600 of equipment in the company.
4. The company purchased $360 of additional supplies on credit.
5. The company purchased land for $10,600 cash.

On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $82,780 in assets to launch the business. On October 31, the company’s records show the following items and amounts.  

Using the above information prepare an October income statement for the business.

Using the above information prepare an October statement of owner's equity for Ernst Consulting.

Using the above information prepare an October 31 balance sheet for Ernst Consulting.

Also assume the following:  

1. The owner’s initial investment consists of $36,750 cash and $46,030 in land.
2. The company’s $16,580 equipment purchase is paid in cash.
3. The accounts payable balance of $7,250 consists of the $1,960 office supplies purchase and $5,290 in employee salaries yet to be paid.
4. The company’s rent, telephone, and miscellaneous expenses are paid in cash.
5. No cash has been collected on the $12,590 consulting fees earned.

  

Using the above information prepare an October 31 statement of cash flows for Ernst Consulting. 

Explanation

$5,450 Salaries expense – $5,290 still owed = $160 paid to employees.