
Concept Introduction:
Financial Statements: Financial statements are reports of the financial condition of a company or entity. In the financial statements, the management presents the financial performance and position of the company at a point in time. Financial statements disclose the financial effects of business transactions. Financial statements include a
Balance Sheet: Balance sheet provides details of firm’s assets, liabilities and owner’s equity for a given date. The Balance sheet gives a snapshot of what the company owns and owes as well as the amount invested in equity. The Balance sheet follow the below rule
Assets = Liabilities + equity
Income Statement: It is also called profit & loss statement. Income statement provides a snapshot of revenue, expenses and net income of the organization for a given period.
Statement of Cash Flows: It is a financial statement that shows the movements of cash and Bank balance during a period. It describes the amount of cash generated by the company during a period and the use of the cash.
1.
To determine: The following about company V.
a. Amount of equity as on December 31, 2016.
b. Amount of equity as on December 31, 2017.
c. Net income or loss for the year 2017.

Explanation of Solution
The amount of equity and net income or loss, about company V is as below:
a. Amount of equity as on December 31, 2016 = $29,000
b. Amount of equity as on December 31, 2017=$23,000
c. Net income or loss for the year 2017 is the loss of $5,500.
2.
The following about company W.
a. Amount of equity as on December 31, 2016.
b. Amount of equity as on December 31, 2017.
c. Amount of liabilities as on December 31, 2017.

Explanation of Solution
The amount of equity and liabilities, about company W is as below:
a. Amount of equity as on December 31, 2016 = $20,000
b. Amount of equity as on December 31, 2017=$78,000
c. Amount of liabilities as on December 31, 2017 is $22,000
3.
To Compute: The amount of owner investment for company X during 2017.

Explanation of Solution
The amount of owner investment for company X during 2017 is $29,200
Calculations:
Amount of equity on December 2016 = Assets - Liabilities
Amount of equity on December 2017 = Assets - Liabilities
Owner investment = Closing equity opening equity Net income cash withdrawals
4.
To Compute: The amount of assets for company Y on December 31, 2017.

Explanation of Solution
The amount of assets for company Y on December 31, 2017, is $135,100
Calculations:
Amount of equity on December 2016 = Assets - Liabilities
Amount of equity on December 2017 =
Assets on December 31, 2017
5.
To Compute: The amount of liabilities for company Z on December 31, 2016.

Explanation of Solution
The amount of liabilities for company Z on December 31, 2016, is $100,000.
Calculations:
Amount of equity on December 2017
Amount of equity on December 2016 =
Liabilities on December 31, 2016
Want to see more full solutions like this?
Chapter 1 Solutions
Fundamental Accounting Principles
- Hunger Games Corporation has had a defined benefit pension plan for three decades. Two years ago, the company improved the benefits at a cost of $2,800,000. Pension plan assets were $84,000,000 while pension obligations were $76,000,000 at the beginning of the year. For the current year, Hunger Games 's pension plan incurred current service cost of $6,400,000 and interest of $8,600,000. The pension's assets earned $9,000,000, which is $400,000 below expectations. There were no actuarial gains or losses for the year. Required Compute the pension expense for the year. Record the journal entries for Hunger Games's pension plan.arrow_forwardI need guidance with this financial accounting problem using the right financial principles.arrow_forwardI need the correct answer to this financial accounting problem using the standard accounting approach.arrow_forward
- Can you explain this financial accounting question using accurate calculation methods?arrow_forwardIn the first two years of operations, Expos company reports taxable income of $125,000 and $65,000, respectively. In the first two years, the company paid $50,000 and $13,000. It is now the end of the third year, and the company has a loss of $160,000 for tax purposes. The company carries losses to the earliest year possible. The tax rate is currently 25%. Required Compute the amount of income tax payable or receivable in the current (third) year.arrow_forwardFinancial Accountingarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





