
Concept explainers
REQUIREMENT 1
To calculate:
We have to calculate the following for company V -
- Amount of equity on December 31, 2014.
- Amount of equity on December 31, 2015.
- Amount of net income/loss for the year 2015.
REQUIREMENT 1

Answer to Problem 2BPSB
Solution:
- Amount of equity for the company V on December 31,2014 is $29,000
- Amount of equity for the company V on December 31,2015 is $23,000
- Amount of net/income for the year 2015 is $5500.
Explanation of Solution
Explanation:
- As per
accounting equation , total amount of asset is equivalent to the sum of total liabilities and equity.
Therefore, equity will be calculated as follows-
- As per accounting equation, total amount of asset is equivalent to the sum of total liabilities and equity. Therefore, equity will be calculated as follows-
- Calculation of net income/loss for the year 2015.
Particulars | Amount ($) |
Asset | 54000 |
Less: liabilities | 25000 |
Equity on December 31, 2014 | $29000 |
Particulars | Amount ($) |
Asset | 59000 |
Less: liabilities | 36000 |
Equity on December 31, 2015 | $23,000 |
Particulars | Amount ($) |
Equity on December 31,2015 | 23,000 |
Add: owner cash withdrawal | 5,500 |
Less: | |
Equity on December 31,2014 | 29,000 |
Owner investment | 5000 |
Net loss | 5500 |
REQUIREMENT 2
To calculate:
We have to calculate the following for company W -
- Amount of equity on December 31, 2014.
- Amount of equity on December 31, 2015.
- Amount of liabilities on December 31, 2015
REQUIREMENT 2

Answer to Problem 2BPSB
Solution:
- Amount of equity for the company W on December 31,2014 is $20,000
- Amount of equity for the company W on December 31,2015 is $78,000
- Amount of liabilities on December 31, 2015 is $22,000.
Explanation of Solution
Explanation:
- Calculation of amount of equity on December 31,2014
- Calculation of amount of equity on December 31,2015
- Calculation of amount of liabilities on December 31, 2015
Particulars | Amount ($) |
Asset | 80,000 |
Less: liabilities | 60,000 |
Equity on December 31, 2014 | $20,000 |
Particulars | Amount ($) |
Equity on December 31, 2014 | 20,000 |
Add: net income | 40,000 |
Owner investment | 20,000 |
Less: owner cash withdrawal | 2,000 |
Equity on December 31, 2015 | $78,000 |
Particulars | Amount ($) |
Assets on December 31,2015 | 100,000 |
Less: Equity on December 31, 2015 | 78,000 |
Liabilities on December 31, 2015 | $22,000 |
REQUIREMENT 3
To calculate:
REQUIREMENT 3

Answer to Problem 2BPSB
We have to calculate the owner investment for company X during 2015.
Solution
The owner investment for company X during 2015 is $29,200
Explanation of Solution
Explanation:
Firstly, amount of equity will be calculated for both years.
Particulars | Amount ($) |
Asset | 141,500 |
Less: liabilities | 68,500 |
Equity on December 31, 2014 | $73,000 |
Particulars | Amount ($) |
Asset | 186500 |
Less: liabilities | 65800 |
Equity on December 31, 2015 | $120,700 |
Calculation of owner investment for company X during 2015.
Particulars | Amount ($) |
Equity on December 31,2015 | 120,700 |
Add: owner cash withdrawal | 0 |
Less: | |
Equity on December 31,2014 | 73,000 |
Net income | 18,500 |
Owner investment | $29,200 |
REQUIREMENT 4
To calculate:
REQUIREMENT 4

Answer to Problem 2BPSB
We have to calculate the amount of asset for company Y on December 31, 2015.
Solution
The amount of asset for company Y on December 31, 2015 is $135,100.
Explanation of Solution
Explanation:
Calculation of amount of equity on December 31, 2014
Particulars | Amount ($) |
Asset | 92,500 |
Less: liabilities | 51,500 |
Equity on December 31, 2014 | $41,000 |
Calculation of amount of equity on December 31,2015
Particulars | Amount ($) |
Equity on December 31, 2014 | 41,000 |
Add: net income | 24,000 |
Owner investment | 48,100 |
Less: owner cash withdrawal | 20,000 |
Equity on December 31, 2015 | $93,100 |
- Calculation of amount of asset for Company Y on December 31, 2015
Particulars | Amount ($) |
Equity on December 31, 2015 | 93,100 |
Add: Liabilities on December 31, 2015 | $42,000 |
Asset on December 31, 2015 | $135,100 |
REQUIREMENT 5
To calculate:
REQUIREMENT 5

Answer to Problem 2BPSB
We have to calculate the amount of liabilities for company Z on December 31, 2014.
Solution
The amount of liabilities for company Z on December 31, 2014 is $100,000.
Explanation of Solution
Explanation:
Calculation of amount of equity on December 31, 2015
Particulars | Amount ($) |
Asset | 170,000 |
Less: liabilities | 42,000 |
Equity on December 31, 2015 | $128,000 |
Calculation of amount of equity on December 31, 2014
Particulars | Amount ($) |
Equity on December 31, 2015 | 128,000 |
less: net income | 32,000 |
Owner investment | 60,000 |
Add : owner cash withdrawal | 8,000 |
Equity on December 31, 2014 | $44,000 |
- Calculation of amount of liabilities for Company Z on December 31, 2014
Particulars | Amount ($) |
Asset on December 31, 2014 | $144,000 |
Less: Equity on December 31, 2014 | 44,000 |
Liabilities on December 31, 2014 | $100,000 |
Want to see more full solutions like this?
Chapter 1 Solutions
FUND.ACCT.PRIN -ONLINE ONLY >I<
- Gross profit would be_.arrow_forwardWhat is Bobby's 2019 net income using accrual accounting?arrow_forwardJob 786 was one of the many jobs started and completed during the year. The job required $8,400 in direct materials and 35 hours of direct labor time at a total direct labor cost of $9,300. If the job contained five units and the company billed at 70% above the unit product cost on the job cost sheet, what price per unit would have been charged to the customer?arrow_forward
- What is the company's gross profit?arrow_forwardMOH Cost: Top Dog Company has a budget with sales of 7,500 units and $3,400,000. Variable costs are budgeted at $1,850,000, and fixed overhead is budgeted at $970,000. What is the budgeted manufacturing cost per unit?arrow_forwardWhat was Ghana's cost of goods sold for 2023?arrow_forward
- Need Answerarrow_forwardSameer has $9,800 of net long-term capital gain and $5,200 of net short-term capital loss. This nets out to a: (a) $4,700 net long-term loss (b) $4,600 net long-term gain (c) $4,700 net short-term gain (d) $4,700 short-term loss helparrow_forwardWhat is the adjusted cost of goods sold for the year?arrow_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





