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1.
Calculate (a) the value of equity on December 31, 2016 (b) value of equity on December 31, 2017 (c) value of net income or loss for the year 2017 for Company V.
1.
![Check Mark](/static/check-mark.png)
Explanation of Solution
Liabilities:
Liabilities are an obligation of the business to pay to the creditors in future for the goods and services purchased on account or any for other financial benefit received. It can be current liabilities or a non-current liabilities depending upon the time period in which it is paid.
(a)
Calculate the value of equity on December 31, 2016.
Therefore, the value of equity as on December 31, 2016 is $29,000.
(b)
Calculate the value of equity on December 31, 2017.
Therefore, the value of equity as on December 31, 2017 is $23,000.
(c)
Calculate the value of net income for the year 2017 for Company B.
Therefore, net loss of Company B reported an amount of $($5,500) during the year 2017.
2.
Calculate (a) the value of equity on December 31, 2016 (b) value of equity on December 31, 2017 (c) value of liabilities on December 31, 2017 for Company W.
2.
![Check Mark](/static/check-mark.png)
Explanation of Solution
(a)
Calculate the value of equity on December 31, 2016.
Therefore, the value of equity as on December 31, 2016 is $20,000.
(b)
Calculate the value of equity on December 31, 2017.
Therefore, the value of equity as on December 31, 2017 is $78,000.
(c)
Calculate the value of liabilities on December 31, 2017.
Therefore, the value of liabilities as on December 31, 2017 is $22,000.
3.
Calculate (a) value of stock issuance during the year 2017 for Company X, (b) the value of assets on December 31, 2017 for Company Y, (c) value of liabilities for December 31, 2016 for Company Z.
3.
![Check Mark](/static/check-mark.png)
Explanation of Solution
(a)
Calculate the value of stock issuance of Company X for the year 2017.
Therefore, stock issuance of Company X reported an amount of $29,200 during the year 2017.
Working notes:
Calculate the value of equity on December 31, 2016 of Company X.
Calculate the ending balance of equity of Company X.
(b)
Calculate the value of assets on December 31, 2017 for Company Y.
Therefore, the value of assets as on December 31, 2017 is $135,100.
Working notes:
Calculate the value of equity on December 31, 2016 of Company Y.
Calculate the ending balance of equity of Company Y.
(c)
Calculate the value of liabilities of Company Z for December 31, 2016.
Therefore, the value of liabilities as on December 31, 2016 is $100,000.
Working notes:
Calculate the value of equity on December 31, 2017.
Calculate the ending balance of equity.
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Chapter 1 Solutions
Financial Accounting Fundamentals
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