4. (a)increase Ex.1-12 1. c 6. c 2. a 7. d 3. e 8. a 4. e 9. e 5. c 10. e Ex.1-13 a. (1)Providedcateringservicesforcash,$71,800. (2) Purchaseoflandforcash,$15,000. (3) Paymentofcashforexpenses,$47,500. (4) Purchaseofsuppliesonaccount,$1,100. (5) Withdrawalofcashbyowner,$5,000. (6) Paymentofcashtocreditors,$4,000. (7) Recognitionofcostofsuppliesused,$1,500. b. $300($40,300 – $40,000) c. $17,800 (–$5,000+$71,800–$49,000) d. $22,800 ($71,800–$49,000) e. $17,800 ($22,800–$5,000) Ex.1-14 No.Itwouldbeincorrecttosaythatthebusinesshadincurredanetlossof $8,000.The excessofthewithdrawalsoverthenetincomefortheperiodisadecreaseinthe Ex.1-15 Jupiter Owner'sequityatendofyear($844,000–$320,000) $524,000 Deductowner'sequityatbeginningofyear($550,000–$215,000) 335,000 Netincome(increaseinowner’sequity) $189,000 Mars Increaseinowner’sequity(asdeterminedforJupiter) $189,000 Addwithdrawals 36,000 Netincome $225,000
Prob.1-2A 1. NORDICTRAVELAGENCY IncomeStatement FortheYearEndedDecember31,2019 Feesearned $912,500 Expenses: Wagesexpense $510,000 Rentexpense 36,000 Utilitiesexpense 28,500 Suppliesexpense 4,100 Miscellaneousexpense 6,400 Totalexpenses 585,000 Netincome $327,500 2. NORDICTRAVELAGENCY StatementofOwner’sEquity FortheYearEndedDecember31,2019 IanEisele,capital,January1,2019 $670,000 Netincomefortheyear $327,500 Withdrawals (42,000) Increaseinowner’sequity 285,500 IanEisele,capital,December31,2019 $955,500 3. NORDICTRAVELAGENCY Assets Cash $ 190,500 Accountsreceivable 285,000 Supplies 5,500 Land 544,000 Totalassets $1,025,000 Liabilities Accountspayable $ 69,500 Owner’sEquity IanEisele,capital 955,500 Totalliabilitiesandowner’sequity $1,025,000 4. IanEisele,Capitalof$955,500 Prob.1-3A
Prob.1-4A(Concluded)2. 2. HALFMOONREALTY IncomeStatement FortheMonthEndedJuly31,2019 Salescommissions $41,500 Expenses: Salariesexpense $5,000 Rentexpense 3,600 Automobileexpense 3,050 Suppliesexpense 900 Miscellaneousexpense 1,600 Totalexpenses 14,150 Netincome $27,350 HALFMOONREALTY StatementofOwner’sEquity FortheMonthEndedJuly31,2019 PatGlenn,capital,July1,2019 $ 0 InvestmentonJuly1,2019 $25,000 NetincomeforJuly 27,350 Withdrawals (4,000) Increaseinowner’sequity 48,350 PatGlenn,capital,July31,2019 $48,350 HALFMOONREALTY Assets Cash $48,050 Supplies 950 Totalassets $49,000 Liabilities Accountspayable $ 650 Owner’sEquity PatGlenn,capital 48,350 Totalliabilitiesandowner’sequity $49,000 Prob.1-5A 1. Assets = Liabilities + Owner’s Equity
+ Dry Cleaning Revenue – Dry Cleaning Exp. – Wages Exp. – Rent Exp. – Supplies Exp. – Truck Exp. – Utilities Exp. – Misc. Exp. Bal. (a) Bal. (b) Bal. (c) + 32,125 Bal. 32,125 (d) – 6,000 Bal. 32,125 – 6,000 (e) Bal. 32,125 – 6,000 (f) Bal. 32,125 – 6,000 (g) + 84,750 Bal. 116,875 – 6,000 (h) – 29,500 Bal. 116,875 – 29,500 – 6,000 (i) – 7,500 – 2,500 – 1,300 Bal. 116,875 – 29,500 – 7,500 – 6,000 – 2,500 – 1,300 (j) Bal. 116,875 – 29,500 – 7,500 – 6,000 – 2,500 – 1,300 (k) – 3,600 Bal. 116,875 – 29,500 – 7,500 – 6,000 – 3,600 – 2,500 – 1,300 (l) Bal. 116,875 – 29,500 – 6,000 – 3,600 – 2,500 – 1,300 – 2,700 Prob.1-5A(Continued) 3. D'LITEDRYCLEANERS IncomeStatement FortheMonthEndedJuly31,2019 Drycleaningrevenue $116,875 Expenses: Drycleaningexpense $29,500 Wagesexpense 7,500 Rentexpense 6,000 Suppliesexpense 3,600 Truckexpense 2,500 Utilitiesexpense 1,300 Miscellaneousexpense 2,700
Totalexpenses 53,100 Netincome $63,775 D'LITEDRYCLEANERS JoelPalk,capital,July1,2019 $180,000 AdditionalinvestmentduringJuly $35,000 NetincomeforJuly 63,775 Withdrawals (12,000) Increaseinowner’sequity 86,775 JoelPalk,capital,July31,2019 $266,775 D'LITEDRYCLEANERS BalanceSheet July31,2019 Assets Cash $95,325 Accountsreceivable 89,750 Supplies 5,900 Land 125,000 Totalassets $315,975 Liabilities Accountspayable $49,200 Owner’sEquity JoelPalk,capital 266,775 Totalliabilitiesandowner’sequity $315,975 Prob.1-5A(Concluded) 4. (Optional) D'LITEDRYCLEANERS StatementofCashFlows FortheMonthEndedJuly31,2019 Cashflowsfromoperatingactivities: Cashreceiptsfromcustomers* $120,125 Cashpaymentsforexpensesandpaymentsto creditors** (42,800) Netcashflowfromoperatingactivities $77,325 Cashflowsusedforinvestingactivities: Cashpaymentforpurchaseofland (50,000)
Prob.1-1B 1. Assets = Liabilities + Owner's Equity Cash + Accts. Rec. + Supplies = Payable + Amy Austin, Capital Amy Austin, Drawing + Fees Earned – Rent – Salaries – Supplies Expense – Auto Exp. – Misc. Exp. (a) + 50,000 + 50,000 (b) + 4,000 + 4,000 Bal. 50,000 4,000 4,000 50,000 (c) – 2,300 – 2,300 Bal. 47,700 4,000 1,700 50,000 (d) + 13,800 + Bal. 61,500 4,000 1,700 50,000 (e) – 5,000 – 5,000 Bal. 56,500 4,000 1,700 50,000 – 5,000 (f) – 1,450 – 1,150 – Bal. 55,050 4,000 1,700 50,000 – 5,000 – 1,150 – (g) – 2,500 – 2,500 Bal. 52,550 4,000 1,700 50,000 – 5,000 – 2,500 – 1,150 – (h) – 1,300 – 1,300 Bal. 52,550 2,700 1,700 50,000 – 5,000 – 2,500 – 1,300 – 1,150 – (i) + 12,500 + Bal. 52,550 12,500 2,700 1,700 50,000 – 5,000 – 2,500 – 1,300 – 1,150 – (j) – 3,900 – 3,900 Bal. 48,650 12,500 2,700 1,700 50,000 – 3,900 – 5,000 – 2,500 – 1,300 – 300 2. 0 0 0 30 30 30 30 30
Prob.1-4B 1. Assets = Liabilities + Owner's Equity Cash + Supplies = Payable + Maria Adams, Capital – Maria Adams, Drawing + Comm. – Rent Exp. Salaries Exp. – Auto Exp. – Exp. – Misc. Exp. (a) + 24,000 + 24,000 (b) – 3,600 – 3,600 Bal. 20,400 24,000 – 3,600 (c) – 1,950 – 1,350 – 600 Bal. 18,450 24,000 – 3,600 – 1,350 – 600 (d) + 1,200 + 1,200 Bal. 18,450 1,200 1,200 24,000 – 3,600 – 1,350 – 600 (e) + 19,800 + 19,800 Bal. 38,250 1,200 1,200 24,000 19,800 – 3,600 – 1,350 – 600 (f) – 750 – 750 Bal. 37,500 1,200 450 24,000 19,800 – 3,600 – 1,350 – 600 (g) – 2,500 1,200 450 24,000 19,800 – 3,600 – 2,500 – 1,350 – 600 Bal. 35,000 2,500 (h) – 3,500 – 3,500 Bal. 31,500 1,200 450 24,000 – 3,500 19,800 – 3,600 – 2,500 – 1,350 – 600 (i) – 900 – 900 Bal. 300 450 24,000 – 3,500 19,800 – 3,600 – 2,500 – 1,350 – – 0
(d) + 72,000 Bal. 21,000 152,000 11,000 31,500 (e) – 20,000 – 20,000 Bal. 1,000 152,000 11,000 11,500 (f) + 8,000 + 8,000 Bal. 1,000 152,000 19,000 19,500 (g) + 38,000 Bal. 39,000 152,000 19,000 19,500 (h) + 77,000 – 77,000 Bal. 116,000 75,000 19,000 19,500 (i) + 29,450 Bal. 116,000 75,000 19,000 48,950 (j) – 29,200 Bal. 86,800 75,000 19,000 48,950 (k) – 7,200 0
Bal. 86,800 75,000 11,800 48,950 (l) – 5,000 – 5,000 Bal. 81,800 75,000 11,800 48,950 – 5,000 Prob.1-5B(Continued) Owner’s Equity (Continued) + Dry Cleaning Revenue – Dry Cleaning Exp. – Wages Exp. – Exp. – Rent Exp. – Truck Exp. – Utilities Exp. – Misc. Exp. Bal. (a) Bal. (b) Bal. (c) – 4,000 Bal. – 4,000 (d) + 72,000 Bal. 72,000 – 4,000 (e) Bal. 72,000 – 4,000 (f) Bal. 72,000 – 4,000 (g) + 38,000 Bal. 110,000 – 4,000 (h) Bal. 110,000 – 4,000 (i) – 29,450 Bal. 110,000 – 29,450 – 4,000 (j) – 24,000 – 2,100 – 1,800 – 1,300 Bal. 110,000 – 29,450 – 24,000 – 4,000 – 2,100 – 1,800 – 1,300 (k) – 7,200 Bal. 110,000 – 29,450 – 24,000 – 7,200 – 4,000 – 2,100 – 1,800 – 1,300 (l) Bal. 110,000 – 29,450 – 24,000 – 7,200 – 4,000 – 2,100 – 1,800 – 1,300
n. Netcashflowfromoperatingactivities,$147,200($400,000–$252,800) o. Netcashflowfromfinancingactivities,$96,000($160,000–$64,000) p. NetincreaseincashandMay31,2019,cashbalance,$123,200($147,200–$120,000 +$96,000);also,thecashbalanceonthebalancesheet CONTINUING PROBLEM 1. Assets = Liabilities + Equity Cash + Accts. Rec. + = Payable + – Peyton Smith, Drawing + Fees Earned June + + June 2 + + Bal. June – Bal. June + + 350 Bal. 350 June – Bal. 350 June – Bal. 350 June 12 – Bal. 350
Bal. 1,000 250 June 30 – – 500 Bal. 1,000 170 250 – 500 Continuing Problem (Continued) Owner’s Equity (Continued) – Music Exp. – Office Rent Exp. – Equip. Rent Exp. – Adver- tising Exp. – Wages Exp. – Utilities Exp. – Exp. – Misc. Exp. June June 2 Bal. June 2 – 800 Bal. – 800 June 4 Bal. – 800 June – 500 Bal. – 800 – 500 June – 675 Bal. – 800 – 675 – 500 June 12 – 350 Bal. – 350 – 800 – 675 – 500 June 13 Bal. – 350 – 800 – 675 – 500 June 16 Bal. – 350 – 800 – 675 – 500 June 22 Bal. – 350 – 800 – 675 – 500 June 25 Bal. – 350 – 800 – 675 – 500 June 29 – 240 Bal. – 590 – 800 – 675 – 500 June 30 Bal. – 590 – 800 – 675 – 500 June – 400 Bal. – 590 – 800 – 675 – 500 – 400 June 30 – 300 Bal. – 590 – 800 – 675 – 500 – 400 – 300 June – 180
CP 1-6 1. Assets = Liabilities + Owner's Equity Cash + Supplies = Accts. Payable + Lisa Duncan, Capital – Lisa Duncan, Drawing + Fees Earned – Salaries Expense – Rent Expense – Supplies Expense – Misc. Exp. (a) + 950 + 950 (b) – 300 + 300 Bal. 650 300 950 (c) – 275 – 275 Bal. 375 300 950 – 275 (d) – 100 + 150 – 250 Bal. 275 300 150 950 – 525 (e) + 1,750 + 1,750 Bal. 2,025 300 150 950 1,750 – 525 (f) + 600 + 600 Bal. 2,625 300 150 950 2,350 – 525 (g) – 800 – 800 Bal. 1,825 300 150 950 2,350 – 800 – 525 (h) – 290 – 290 Bal. 1,535 300 150 950 2,350 – 800 – 525 – 290 (i) + 1,300 + 1,300 Bal. 2,835 300 150 950 3,650 – 800 – 525 – 290 (j) – 120 – 120 Bal. 2,835 180 150 950 3,650 – 800 – 525 – 120 – 290 (k) – 400 – 400 Bal. 2,435 180 150 950 – 400 3,650 – 800 – 525 – 120 – 290