Chapter 1, Problem 23E

Using the accounting equation $\text{A}1$ Answer the following questions. Hint: Use the accounting equation.

1. On January 1, Lumia Company's liabilities are $60,000 and its equity is $40,000. On January 3, Lumia purchases and installs solar panel assets costing $10,000. For the panels, Lumia pays $4,000 cash and promises to pay the remaining $6,000 in six months. What is the total of Lumia's assets after the solar panel purchase?
2. On March 1, ABX Company's assets are $100,000 and its liabilities are $30,000. On March $5,\text{ABX}$ is fined $15,000for failing emission standards. ABX immediately pays the fine in cash. After the fine is paid, what is the amount of equity for ABX?
3. On August 1, Lola Company's assets are $30,000 and its liabilities are $10,000. On August 4, Lola issues a sustainability report following SASB guidelines. Investors react positively to this report. On August 5, a new investor contributes $3,000 cash and $7,000 in equipment in exchange for ownership in Lola. After the investment, what is the amount of equity for Lola?