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Part
FinancialAccounting
report of status or stocks as of a moment of time, whereas the other two sratements sum_ marize flows over a period of time. In the United states, calculating taxable income for income tax purposes differs from the process of calcurating income for the financial accounting income statement. The basic accounting equation is Assets
Liabilities
Owners' eouitv
Problems
Problem 1-1.
S12,000 in cash, held g95,000 ofinventory,
Problem 1-2.
; :l#i'"T#T
l["ff: j]tlfiil,l.:lf
Current assets Noncurrent assets
Total assets
Selected balance sheet items are shown for the Microtech company. compute the missing rour vears' what basic accounting equation diJ you apply in makl
Year
?
Year 2
Year 3
$113,624
$?
198,014
Year 4
$ 85,124
162,011
$?
'l
$surtoo
$?
$
40,220
7
51
56,142
?
$? $?
60,1 00
,021
u?g/!l
$?
30,222 170,O00
214,15s
13,78s $524,600
173,295
170,000
1,452
(3,644)
2,350 $220,111
I?!!,41!
s7
tffi"rff m:ffiitNe
Selected income statement items are shown forAstrotech company. compute the missing rour vears' what basic accounting did you apply
"quution
in makl
(Hint'To estimate the year 4 missing numberc, compute the typical percentage each ex_ pense item is of sales foryears I to 3 anl apply the percentage r".h expense item to Year 4's sales.)
d;;; ;;
Year
Sa les
1
1
Year 2
Year 3
$1
$12,01
3,01
?
$?
2,992
Year 4
$ 1 0,000 ')
1,54s
)
8,659
?
. 6,201
2,799
?
9,976
6,429
)
?
)
't,019
Net income
$ 16.9
qLzq
zt505 945
$ 1,418
Chapter
Problem 1-4.
An analysis of the transactions made by Acme Consulting for the month of July is shown
below.
Cash + $20,000
+ Accounts +
Receivable
SuPPlies
Equipment
= Accounts +
Pavable
Owners'
+ $20,000
Description of
Transaction
lnvestment
+ $ 7,000
+$2,000
+$1,000 +$5,000
5,000
Sa la
ries
Revenues
$1
,000
+$
200
-$
Required: a. Explain
200
$ $ -$ -$
750 500
Rent
Utilities
Travel
200 200
each transaction.
b. List the changes in the company's balance sheet during the month of July. c. PreDare an income statement for the month (ignore taxes)' d. Explain the changes in the Cash account. e. Explain why the change in the Cash account and the month's income are not the same.
Problem 1-5.
During the month of June, Bon voyage Travel recorded the following transactions:
1. Owners invested $25,000 in cash to start the business. They received common stock. 2. The month's rent of $500 was prepaid in cash.
3. Equipment costing 58,000 was bought on credit. 4. 5500 was paid for office suPPlies. 5. Advertising costing $750 was paid for with cash' 6. Paid $3,000 employee salaries in cash. 7. Earned travel commissions of $ I 0,000 of which $2,000 was received in 8. Paid $5,000 of the $8,000 owed to the equipment supplier' 9. Used $100 of the office suPPlies.
10. Charged Si,000 ofmiscellaneous expenses on the corporate credit card.
cash.
Required: a. prepare an analysis of the month's transactions using the same tabular format
shown in Problem l- 4 tignore taxes)
as
b. Ex.plain how the transactions during the month changed the basic accounting equaOwners' equity) for the company' c. Prepare an income statement for the month' d. Explain the changes in the Cash account. e. Explain why the change in the Cash account and the month's income are not the
tion (Assets
Liabilities
same.