Instructions: Present the solutions, with appropriate supporting calculations, for each of the following independent problems. A.Given the following information, compute 2017net income for Orson Company. Stockholders’ equity—January 1, 2017$120,000 Stockholders’ equity—December 31, 2017150,000 Stockholder investments during 201725,000 Dividends paid during 201738,000 B.Indicate the impact on the accounting equation of each of the following transactions.Item 0 is given as an example. 0.Paid dividends to stockholders. Ans.; Decreased assets and decreased stockholders’ equity 1.Stockholder investment of cash. 2.Purchase of equipment for cash 3.Borrowed money from bank by issuing a note payable. 4.Purchase of office furniture for cash. 5.Purchase of supplies on account. 6.Collect cash from customers for services performed. 7.Paid for a 24-month insurance policy 8.Paid monthly payroll. A.Ending stockholders’ equity, 12/31/17....................$150,000 Beginning stockholders’ equity, 1/1/17.......................(120,000) Increase in stockholders’ equity............................30,000 Dividends paidduring 2017................................ 38,000 68,000 Investments during 2017.................................(25,000) Net income in 2017......................................$ 43,000 B.1.Increases assets and increasesstockholders’ equity. 2.No effect. 3.Increases assets and increases liabilities. 4.No effect. 5.Increases assets and increases liabilities. 6.Increases assets and increasesstockholders’ equity. 7.No effect. 8.Decreases assets and decreasesstockholders’ equity
Instructions: Present the solutions, with appropriate supporting calculations, for each of the following independent problems.
A.Given the following information, compute 2017net income for Orson Company.
Stockholders’ equity—December 31, 2017150,000
Stockholder investments during 201725,000
Dividends paid during 201738,000
B.Indicate the impact on the
0.Paid dividends to stockholders. Ans.; Decreased assets and decreased stockholders’ equity
1.Stockholder investment of cash.
2.Purchase of equipment for cash
3.Borrowed money from bank by issuing a note payable.
4.Purchase of office furniture for cash.
5.Purchase of supplies on account.
6.Collect cash from customers for services performed.
7.Paid for a 24-month insurance policy
8.Paid monthly payroll.
A.Ending stockholders’ equity, 12/31/17....................$150,000
Beginning stockholders’ equity, 1/1/17.......................(120,000)
Increase in stockholders’ equity............................30,000
Dividends paidduring 2017................................ 38,000
68,000
Investments during 2017.................................(25,000)
Net income in 2017......................................$ 43,000
B.1.Increases assets and increasesstockholders’ equity.
2.No effect.
3.Increases assets and increases liabilities.
4.No effect.
5.Increases assets and increases liabilities.
6.Increases assets and increasesstockholders’ equity.
7.No effect.
8.Decreases assets and decreasesstockholders’ equity
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