Chapter 1, Problem 1.5DIE

(a)

To determine

Assets: Assets are the resources owned by the business that are used for current and future revenue generation of the business. Therefore, the value of the assets matches with the amount of owners’ capital investment and the amount of borrowed fund. This fact is depicted in the accounting equation that equates assets with the sum total of owners’ equity and the liabilities. Examples of assets are: cash, receivables, investments, inventory, property, plant, and equipment (fixed assets like land, furniture, buildings), and intangible assets (goodwill, trademarks, patents, and franchises)

The total assets of G. Company.

(b)

To determine

The net income of G. Company.

(c)

To determine

Stockholders’ Equity: “Stockholders’ equity refers to the claim of the owners or the stockholders of a company, on its assets. It consists of the contributed capital from the stockholders along with accumulated retained earnings over the years. It is also known as the ‘net worth’ of the company, as it is derived by subtracting the total liabilities from the total assets.

The total stockholders’ equity of G. Company.