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QS 1-7 a. Total assets of Charter Company equal $700,000 and its equity is $420,000. What is the amount of its liabilities? Applying the accounting equation A1 b. Total assets of Martin Marine equal $500,000 and its liabilities and equity amounts are equal to each other. What is the amount of its liabilities? What is the amount of its equity?

QS 1-7 a. Total assets of Charter Company equal $700,000 and its equity is $420,000. What is the amount of its liabilities? Applying the accounting equation A1 b. Total assets of Martin Marine equal $500,000 and its liabilities and equity amounts are equal to each other. What is the amount of its liabilities? What is the amount of its equity?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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24 Chapter 1 Accounting in Business Complete the following table with either a yes or no regarding the attributes of a sole proprietorsnip. partnership, corporation, and limited liability company (LLC). QS 1-5 Identifying attributes of businesses LLC Partnership Corporation C2 Sole Proprietorship Attribute Present 1. Business taxed...... 2. Limited liability...... 3. Legal entity .. allld bos od QS 1-6 Identifying accounting principles and assumptions Identify the accounting principle or assumption that best explains each situation. 1. In December of this year, Chavez Landscaping received a customer's order and cash prepayment to install sod at a house that would not be ready for installation until March of next year. Chavez should record the revenue from the customer order in March of next vear, not in December of this year. 2. If $51,000 cash is paid to buy land, the land is reported on the buyer's balance sheet at $51,000. 3. Mike Derr owns both Sailing Passions and Dockside Digs. In preparing financial statements for Dock- side Digs, Mike makes sure that the expense transactions of Sailing Passions are kept separate from Dockside Digs's transactions and financial statements. C2 a. Total assets of Charter Company equal $700,000 and its equity is $420,000. What is the amount of its liabilities? QS 1-7 Applying the accounting equation A1 b. Total assets of Martin Marine equal $500,000 and its liabilities and equity amounts are equal to each other. What is the amount of its liabilities? What is the amount of its equity? QS 1-8 1. Use the accounting equation to compute the missing financial statement amounts (a), (b), and (c). Applying the accounting equation A B D. A1 1 Company Assets Liabilities Equity $ 75,000 (b) 85,000 2 1 $ (0) $ 40,000 3 25,000 70,000 4 3 20,000 (c) 2. Use the expanded accounting equation to compute the missing financial statement amounts (a) and (b), A D E F 1 Owner, Owner, Withdrawals Company 3 2 Assets Liabilities Capital Revenues Expenses $ 40,000 $ 80,000 $ 16,000 $ 32,000 $ 20.000 $ 44,000 $0 (0) $24,000 $ 8,000 $18,000 4 2 (b) QS 1-9 Determine whether each of the following transactions increases or decreases equity. Determining effects of transactions on equity a. Owner invested cash in the company. b. Incurred maintenance expenses. c. Performed services for a client. d. Incurred employee wage expenses. P1 QS 1-10 Identifying effects of transactions using Create a table similar to Exhibit 1.9. Then use additions and subtractions to show the dollar effects of oneh transaction on individual items of the accounting equation. accounting equation- revenues and expenses Assets Liabilities Equity P1 Cash + Accounts Accounts Owner, %3D Owner, Revenues Receivable Payable Capital Expenses Withdrawals
Transcribed Image Text:24 Chapter 1 Accounting in Business Complete the following table with either a yes or no regarding the attributes of a sole proprietorsnip. partnership, corporation, and limited liability company (LLC). QS 1-5 Identifying attributes of businesses LLC Partnership Corporation C2 Sole Proprietorship Attribute Present 1. Business taxed...... 2. Limited liability...... 3. Legal entity .. allld bos od QS 1-6 Identifying accounting principles and assumptions Identify the accounting principle or assumption that best explains each situation. 1. In December of this year, Chavez Landscaping received a customer's order and cash prepayment to install sod at a house that would not be ready for installation until March of next year. Chavez should record the revenue from the customer order in March of next vear, not in December of this year. 2. If $51,000 cash is paid to buy land, the land is reported on the buyer's balance sheet at $51,000. 3. Mike Derr owns both Sailing Passions and Dockside Digs. In preparing financial statements for Dock- side Digs, Mike makes sure that the expense transactions of Sailing Passions are kept separate from Dockside Digs's transactions and financial statements. C2 a. Total assets of Charter Company equal $700,000 and its equity is $420,000. What is the amount of its liabilities? QS 1-7 Applying the accounting equation A1 b. Total assets of Martin Marine equal $500,000 and its liabilities and equity amounts are equal to each other. What is the amount of its liabilities? What is the amount of its equity? QS 1-8 1. Use the accounting equation to compute the missing financial statement amounts (a), (b), and (c). Applying the accounting equation A B D. A1 1 Company Assets Liabilities Equity $ 75,000 (b) 85,000 2 1 $ (0) $ 40,000 3 25,000 70,000 4 3 20,000 (c) 2. Use the expanded accounting equation to compute the missing financial statement amounts (a) and (b), A D E F 1 Owner, Owner, Withdrawals Company 3 2 Assets Liabilities Capital Revenues Expenses $ 40,000 $ 80,000 $ 16,000 $ 32,000 $ 20.000 $ 44,000 $0 (0) $24,000 $ 8,000 $18,000 4 2 (b) QS 1-9 Determine whether each of the following transactions increases or decreases equity. Determining effects of transactions on equity a. Owner invested cash in the company. b. Incurred maintenance expenses. c. Performed services for a client. d. Incurred employee wage expenses. P1 QS 1-10 Identifying effects of transactions using Create a table similar to Exhibit 1.9. Then use additions and subtractions to show the dollar effects of oneh transaction on individual items of the accounting equation. accounting equation- revenues and expenses Assets Liabilities Equity P1 Cash + Accounts Accounts Owner, %3D Owner, Revenues Receivable Payable Capital Expenses Withdrawals
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