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AccountingAccounting (Text Only)26th Edition

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Chapter 1, Problem 1.7EX
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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

Solutions

Chapter
Section
Problem 1DQ
Problem 2DQ
Problem 3DQ
Problem 4DQ
Problem 5DQ
Problem 6DQ
Problem 7DQ
Problem 8DQ
Problem 9DQ
Problem 10DQ
Problem 1.1APE
Problem 1.1BPE
Problem 1.2APE
Problem 1.2BPE
Problem 1.3APE
Problem 1.3BPE
Problem 1.4APE
Problem 1.4BPE
Problem 1.5APE
Problem 1.5BPE
Problem 1.6APE
Problem 1.6BPE
Problem 1.7APE
Problem 1.7BPE
Problem 1.8APE
Problem 1.8BPE
Problem 1.1EX
Problem 1.2EX
Problem 1.3EX
Problem 1.4EX
Problem 1.5EX
Problem 1.6EX
Problem 1.7EX
Problem 1.8EX
Problem 1.9EX
Problem 1.10EX
Problem 1.11EX
Problem 1.12EX
Problem 1.13EX
Problem 1.14EX
Problem 1.15EX
Problem 1.16EX
Problem 1.17EX
Problem 1.18EX
Problem 1.19EX
Problem 1.20EX
Problem 1.21EX
Problem 1.22EX
Problem 1.23EX
Problem 1.24EX
Problem 1.25EX
Problem 1.26EX
Problem 1.27EX
Problem 1.1APR
Problem 1.2APR
Problem 1.3APR
Problem 1.4APR
Problem 1.5APR
Problem 1.6APR
Problem 1.1BPR
Problem 1.2BPR
Problem 1.3BPR
Problem 1.4BPR
Problem 1.5BPR
Problem 1.6BPR
Problem 1COP
Problem 1.1CP
Problem 1.2CP
Problem 1.3CP
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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
1 views

Accounting equation

Annie Rasmussen is the owner and operator of Go44, a motivational consulting business. At the end of its accounting period, December 31, 2015, Go44 has assets of $720,000 and liabilities of $180,000. Using the accounting equation and considering each case independently, determine the following amounts:

  1. a. Annie Rasmussen, capital, as of December 31, 2015.
  2. b. Annie Rasmussen, capital, as of December 31, 2016, assuming that assets increased by $96,500 and liabilities increased by $30,000 during 2016.
  3. c. Annie Rasmussen, capital, as of December 31, 2016, assuming that assets decreased by $168,000 and liabilities increased by $15,000 during 2016.
  4. d. Annie Rasmussen, capital, as of December 31, 2016, assuming that assets increased by $175,000 and liabilities decreased by $18,000 during 2016.
  5. e. Net income (or net loss) during 2016, assuming that as of December 31, 2016, assets were $880,000, liabilities were $220,000, and there were no additional investments or withdrawals.

To determine

Accounting equation:

Accounting equation is an accounting tool expressed in the form of equation, by creating a relation between resources or assets of a company and claims on the resources by the creditors and owners. Accounting equation is expressed as shown below:

Assets = Liabilities + Shareholders Equity

Owner’s equity of Company G, as per the each situation.

Explanation

a)

Calculate the Owner’s Equity of Company G as on December 31, 2015.

Assets =  Liabilities + Owners' EquityOwners' Equity =  Assets − Liabilities=  $720,000 − $180,000=  $540,000

Hence, the Owner’s Equity of Company G as on December 31, 2015 is $540,000.

b)

Calculate the Owner’s Equity of Company G as on December 31, 2016, assuming assets increased by $96,500 and liabilities increased by $15,000 during 2016.

Assets of 2016 = Assets of 2015 + incerase in 2016= $720,000+ $96,500= $816,500Liabilities of 2016 = Liabilities of 2015 + incerase in 2016= $180,000+30,000= $606,500Owners' Equity =  Assets−Liabilities=  $816,500−$210,000=  $606,500

Hence, the Owner’s Equity of Company G as on December 31, 2016 is $606,500.

c)

Calculate the Owner’s Equity of Company G as on December 31, 2016, assuming assets decreased by $168,000 and liabilities increased by $15,000 during 2016.

Assets of 2016 = Assets of 2015 − decerase in 2016= $720,000−168,000= $552,000Liabilities of 2016 = Liabilities of 2015 + incerase in 2016= $180,000+15,000= $195,000Owners' Equity =  Assets−Liabilities=  $552,000−$195,000=  $357,000

Hence, the Owner’s Equity of Company G as on December 31, 2016 is $357,000

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Ch-1 P-1.1APECh-1 P-1.1BPECh-1 P-1.2APECh-1 P-1.2BPECh-1 P-1.3APECh-1 P-1.3BPECh-1 P-1.4APECh-1 P-1.4BPECh-1 P-1.5APECh-1 P-1.5BPECh-1 P-1.6APECh-1 P-1.6BPECh-1 P-1.7APECh-1 P-1.7BPECh-1 P-1.8APECh-1 P-1.8BPECh-1 P-1.1EXCh-1 P-1.2EXCh-1 P-1.3EXCh-1 P-1.4EXCh-1 P-1.5EXCh-1 P-1.6EXCh-1 P-1.7EXCh-1 P-1.8EXCh-1 P-1.9EXCh-1 P-1.10EXCh-1 P-1.11EXCh-1 P-1.12EXCh-1 P-1.13EXCh-1 P-1.14EXCh-1 P-1.15EXCh-1 P-1.16EXCh-1 P-1.17EXCh-1 P-1.18EXCh-1 P-1.19EXCh-1 P-1.20EXCh-1 P-1.21EXCh-1 P-1.22EXCh-1 P-1.23EXCh-1 P-1.24EXCh-1 P-1.25EXCh-1 P-1.26EXCh-1 P-1.27EXCh-1 P-1.1APRCh-1 P-1.2APRCh-1 P-1.3APRCh-1 P-1.4APRCh-1 P-1.5APRCh-1 P-1.6APRCh-1 P-1.1BPRCh-1 P-1.2BPRCh-1 P-1.3BPRCh-1 P-1.4BPRCh-1 P-1.5BPRCh-1 P-1.6BPRCh-1 P-1COPCh-1 P-1.1CPCh-1 P-1.2CPCh-1 P-1.3CP

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