Chapter 1, Problem 1.3CP

1)

To determine

Accounting equation:

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

Assets = Liabilities + Shareholders Equity

Financial statements:

Financial statements refer to those statements, which are prepared by the Company according to particular formats in accounting to show its financial position. Financial statements include the following statements:

• Cash flow statement

• Income statement

• Balance sheet

• Statement of Owner's Equity

To Indicate: The effect of each given transaction of Company SNV on the accounting equation.

2)

To determine

To Prepare: The income statement for Company SNV for the month ended September 30, 2016.

3)

To determine

To Prepare: The statement of owner's equity for Company SNV for the month ended September 30, 2016.

4)

To determine

To Prepare: The balance sheet for Company SNV for the month ended September 30, 2016.

5)

To determine

To compare: The two given alternatives to get the most income per month.

6)

To determine

To discuss: all the factors LD should consider before a long term arrangement with PTC.