Concept explainers
1.
Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.
To calculate: The net income, asset and liabilities of five different companies are required.
1.
Answer to Problem 2PSB
The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.
Explanation of Solution
Company V
- Amount of Equity on Dec 31, 2017
- Amount of Equity on Dec 31, 2018
- Statement of shareholder’s equity
Particulars | Amount |
Equity, December 31, 2017 |
|
Stock issuance |
|
| |
Net Loss |
|
Cash dividends |
|
Equity, December 31, 2018 |
|
2.
Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.
To calculate: The net income, asset and liabilities of five different companies are required.
2.
Answer to Problem 2PSB
The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.
Explanation of Solution
Company W
- Amount of Equity on Dec 31, 2017
- Amount of Equity on Dec 31, 2018
- Amount of Equity on Dec 31, 2018
Statement of shareholder’s equity
Particulars | Amount |
Equity, December 31, 2017 |
|
Stock issuance |
|
Net income |
|
| |
Cash dividends |
|
Equity, December 31, 2018 |
|
3.
Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.
To calculate: The net income, asset and liabilities of five different companies are required.
3.
Answer to Problem 2PSB
The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.
Explanation of Solution
Company X
Statement of shareholder’s equity
Particulars | Amount |
Equity, December 31, 2017 |
|
Stock issuance |
|
Net income |
|
| |
Cash dividends |
|
Equity, December 31, 2018 |
|
Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.
To calculate: The net income, asset and liabilities of five different companies are required.
Answer to Problem 2PSB
The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.
Explanation of Solution
Company Y
Statement of shareholder’s equity
Particulars | Amount |
Equity, December 31, 2017 |
|
Stock issuance |
|
Net income |
|
| |
Cash dividends |
|
Equity, December 31, 2018 |
|
Amount of Equity on Dec 31, 2018
Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.
To calculate: The net income, asset and liabilities of five different companies are required.
Answer to Problem 2PSB
The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.
Explanation of Solution
Company Z
Statement of shareholder’s equity
Particulars | Amount |
Equity, December 31, 2017 |
|
Stock issuance |
|
Net income |
|
| |
Cash dividends |
|
Equity, December 31, 2018 |
|
Amount of Equity on Dec 31, 2018
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Chapter 1 Solutions
Loose Leaf for Financial Accounting: Information for Decisions
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- Reading and Interpreting Chipotles Financial Statements Refer to the financial statements for Chipotle reproduced in the chapter and answer the following questions. What was the companys net income for 2014? State Chipotles financial position on December 31, 2014, in terms of the accounting equation. By what amount did Leasehold improvements, property and equipment, net, increase during 2014? Explain what would cause an increase in this item.arrow_forwardApex Systems Co. offers its services to residents in the Seattle area. Selected accounts from the ledger of Apex Systems Co. for the fiscal year ended December 31, 2016, are as follows: Prepare a statement of owners equity for the year.arrow_forwardUsing the following data for Sentinel Travel Service as well as the statement of owners equity shown in Practice Exercise 1-5B, prepare a balance sheet as of August 31, 2016:arrow_forward
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