Gen Combo Ll Financial Accounting Fundamentals; Connect Access Card
Gen Combo Ll Financial Accounting Fundamentals; Connect Access Card
7th Edition
ISBN: 9781260581256
Author: John Wild
Publisher: McGraw-Hill Education
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Chapter 1, Problem 2PSB
To determine

Financial Statement:

The Financial statement is the part of final accounts of the company. The primary books of accounts like journal, ledgers are not presentable in front of users that are why the accountant of the company will prepare financial statements. The financial statement only records the quantitative information instead of qualitative one.

Accounting Equation:

The assets, liabilities and equity relation, are known as the accounting equation. Assets are the resources of company and that increase as business expand whereas liabilities are the burden on company that has to pay in future; Equity means the owner claim on assets. An accounting equation represent the assets of the company are equal to the liabilities and equity of the company.

In can be represented as follow,

  

  Assets=Liabilities+Equity

Assets:

Assets are the resources that a company needs to run the business. An asset is economic resources of the company.

Liabilities:

Liabilities are generally the amount owned by the company from lenders, suppliers, or bank. Liabilities are the burden on the company that they have to pay to others.

Equity:

The Company needs finance to run the business. Equity is one of the method through which the company raise the capital.

Net Income:

Total earning of the company is called net income of the company. When the total expense deducted from the total revenue than the resultant is net income or ne loss.Net profit of the company is also called net profit. The investor can take a decision on the basis of net income of the company. If net income is more the investor attract to the company.

1.

a.

To compute: The amount of equity, of V Company as on December 31, 2016.

Expert Solution
Check Mark

Explanation of Solution

Given,

The amount of assets is $54,000.

The amount of liabilities is $25,000.

Formula to calculate equity is,

  Equity=Assetsliabilities

Substitute$54,000 for assets and $25,000 for liabilities.

  Equity=$54,000$25,000=$29,000

Hence, the amount of equity of V Company as on December 31, 2016 is $29,000.

b.

To determine

To compute: The amount of equity, of V Company as on December 31, 2017.

b.

Expert Solution
Check Mark

Explanation of Solution

Given,

The amount of assets is $59,000.

The amount of liabilities is $36,000.

Formula to calculate equity is,

  Equity=Assetsliabilities

Substitute$59,000 for assets and $36,000 for liabilities.

  Equity=$59,000$36,000=$23,000

Hence, the amount of equity of V Company as on December 31, 2017 is $23,000.

c.

To determine

To compute: The amount of net income or loss of V Company as on December 31, 2017.

c.

Expert Solution
Check Mark

Explanation of Solution

Given,

The amount of equity is $29,000 of December 31, 2016.

The amount of equity is $23,000 of December 31, 2017.

Stock issuance is $5,000.

Cash dividend is $5,500.

Formula to calculate net income is,

  Net Income=(Equity at the endEquity in the beginningIssue of stock+Dividend)

Substitute $29,000 for equity in the beginning, $5,000 for issue of stock, $23,000 for equity at the end, $5,500 for dividend.

  Net Income=$23,000$29,000$5,000+$5,500=$28,500$34,000=($5,500)

Hence, the net loss of V Company as on December 31, 2017 is $5,500.

d.

To determine

To compute: The amount of equity, of W Company as on December 31, 2016.

d.

Expert Solution
Check Mark

Explanation of Solution

Given,

The amount of assets is $80,000.

The amount of liabilities is $60,000.

Formula to calculate equity is,

  Equity=Assetsliablities

Substitute$80,000 for assets and $60,000 for liabilities.

  Equity=$80,000$60,000=$20,000

Hence, the amount of equity of W Company as on December 31, 2016 is $20,000.

e.

To determine

To compute: The amount of equity, of W Company as on December 31, 2017.

e.

Expert Solution
Check Mark

Explanation of Solution

Given,

The amount of assets is $100,000.

The amount of equity is $20,000.

Stock issuance is $20,000.

Net income is $40,000.

Cash dividend is $2,000.

Formula to calculate equity is,

  Equity at the end=(Equity in the beginning+Issue of stock+Net incomeDividend)

Substitute $20,000 for equity in the beginning,, $20,000 for issue of stock, $40,00 for net income, $2,000 for dividend.

  Equity at the end=$20,000+$20,000+$40,000$2,000=$80,000$2,000=$78,000

Hence, the amount of equity of W Company as on December 31, 2017 is $78,000.

f.

To determine

To compute: The amount of liabilities, of A Company as on December 31, 2017.

f.

Expert Solution
Check Mark

Explanation of Solution

Given,

The amount of assets is $100,000.

The amount of equity is $78,000.

Formula to calculate liabilities is,

  Liabilities=AssetsEquity

Substitute$100,000 for assets and $78,000 for equity.

  Liabilities=$100,000$78,000=$22,000

Hence, the amount of liabilities of W Company as on December 31, 2017 is $22,000.

g.

To determine

To compute: The amount of stock issuance, of X Company as on December 31, 2017.

g.

Expert Solution
Check Mark

Explanation of Solution

Given,

The amount of equity is $73,000 of December 31, 2016.

The amount of equity is $120,700 of December 31, 2017.

Net income is $18,500.

Formula to calculate stock issuance is,

  Stock Issuances=Equity at the endEquity in the beginningNet Income

Substitute $73,000 for equity in the beginning, $18,500 for net income, $120,700 for equity at the end.

  Stock Issuances=$120,700$73,000$18,500=$29,200

Working Notes:

Calculation of the amount of equity as on December 31, 2016,

  Equity=AssetsLiablities=$141,500$68,500=$73,000

Calculation of the amount of equity as on December 31, 2017,

  Equity=AssetsLiablities=$186,500$65,800=$120,700

Hence, the amount of stock issuances of X Company as on December 31, 2017 is $29,200.

h.

To determine

To compute: The amount of assets, of Y Company as on December 31, 2017.

h.

Expert Solution
Check Mark

Explanation of Solution

Given,

The amount of liabilities is $42,000 as on December 31, 2017.

The amount of equity is $93,100 as on December 31, 2017

Formula to calculate assets is,

  Assets=Liablities+Equity

Substitute$42,000 for liabilities and $93,100 for equity.

  Assets=$42,000+$93,100=$135,100

Working notes:

Calculation of the amount of equity as on December 31, 2016,

  Equity=Assetsliablities=$92,500$51,500=$41,000

Calculation of the amount of equity as on December 31, 2017,

  Equity at the end=( Equity in the beginning+Issue of stock +Net incomeDividend)=$41,000+$48,100+$24,000$20,000=$113,100$20,000=$93,100

Hence, the amount of asset of Y Company as on December 31, 2017 is $135,100.

i.

To determine

To compute: The amount of liabilities, of Z Company as on December 31, 2016.

i.

Expert Solution
Check Mark

Explanation of Solution

Given,

The amount of assets is $114,000 as on December 31, 2016.

The amount of equity is $44,000 as on December 31, 2016.

Formula to calculate equity is,

  Liabilities=AssetsEquity

Substitute$119,000 for assets and $27,500 for equity.

  Liabilities=$114,000$44,000=$70,000

Working Notes:

Calculation of the amount of equity as on December 31, 2017,

  Equity=AssetsLiablities=$170,000$42,000=$128,000

Calculation of the amount of equity as on December 31, 2016,

  Equity in the beginning=( Equity at the end+Dividend Issuance of StockNet income)=$128,000+$8,000$60,000$32,000=$136,000$92,000=$44,000

Hence, the amount of liabilities of Z Company as on December 31, 2016 is $70,000.

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Chapter 1 Solutions

Gen Combo Ll Financial Accounting Fundamentals; Connect Access Card

Ch. 1 - Prob. 6DQCh. 1 - Prob. 7DQCh. 1 - Prob. 8DQCh. 1 - Prob. 9DQCh. 1 - Prob. 10DQCh. 1 - Prob. 11DQCh. 1 - Prob. 12DQCh. 1 - Prob. 13DQCh. 1 - Prob. 14DQCh. 1 - Why is the revenue recognition principle needed?...Ch. 1 - Prob. 16DQCh. 1 - Prob. 17DQCh. 1 - Prob. 18DQCh. 1 - Prob. 19DQCh. 1 - Prob. 20DQCh. 1 - Prob. 21DQCh. 1 - Prob. 22DQCh. 1 - Prob. 23DQCh. 1 - Prob. 24DQCh. 1 - Prob. 25DQCh. 1 - Prob. 26DQCh. 1 - Prob. 27DQCh. 1 - Prob. 28DQCh. 1 - Prob. 29DQCh. 1 - Prob. 30DQCh. 1 - Prob. 31DQCh. 1 - Prob. 32DQCh. 1 - Prob. 33DQCh. 1 - Prob. 1QSCh. 1 - Prob. 2QSCh. 1 - Prob. 3QSCh. 1 - Prob. 4QSCh. 1 - Prob. 5QSCh. 1 - Prob. 6QSCh. 1 - Prob. 7QSCh. 1 - Prob. 8QSCh. 1 - Prob. 9QSCh. 1 - Prob. 10QSCh. 1 - Prob. 11QSCh. 1 - Identifying items with financial statements P2...Ch. 1 - Prob. 13QSCh. 1 - Prob. 14QSCh. 1 - Prob. 15QSCh. 1 - Computing and interpreting return on assets A2 In...Ch. 1 - Prob. 17QSCh. 1 - Prob. 1ECh. 1 - Prob. 2ECh. 1 - Prob. 3ECh. 1 - Prob. 4ECh. 1 - Prob. 5ECh. 1 - Prob. 6ECh. 1 - Prob. 7ECh. 1 - Prob. 8ECh. 1 - Prob. 9ECh. 1 - Prob. 10ECh. 1 - Identifying effects of transactions on the...Ch. 1 - Prob. 12ECh. 1 - Prob. 13ECh. 1 - Prob. 14ECh. 1 - Prob. 15ECh. 1 - Prob. 16ECh. 1 - Prob. 17ECh. 1 - Prob. 18ECh. 1 - Prob. 19ECh. 1 - Prob. 20ECh. 1 - Prob. 21ECh. 1 - Prob. 22ECh. 1 - Using the accounting equation A1 Answer the...Ch. 1 - Prob. 1PSACh. 1 - Prob. 2PSACh. 1 - Prob. 3PSACh. 1 - Prob. 4PSACh. 1 - Prob. 5PSACh. 1 - Prob. 6PSACh. 1 - Prob. 7PSACh. 1 - Prob. 8PSACh. 1 - Prob. 9PSACh. 1 - Prob. 10PSACh. 1 - Prob. 11PSACh. 1 - Prob. 12PSACh. 1 - Prob. 13PSACh. 1 - Prob. 14PSACh. 1 - Identifying effects of transactions on financial...Ch. 1 - Prob. 2PSBCh. 1 - Prob. 3PSBCh. 1 - Prob. 4PSBCh. 1 - Prob. 5PSBCh. 1 - Prob. 6PSBCh. 1 - Prob. 7PSBCh. 1 - Prob. 8PSBCh. 1 - Analyzing transactions and preparing financial...Ch. 1 - Prob. 10PSBCh. 1 - Prob. 11PSBCh. 1 - Prob. 12PSBCh. 1 - Prob. 13PSBCh. 1 - Prob. 14PSBCh. 1 - Prob. 1SPCh. 1 - Prob. 1AACh. 1 - Prob. 2AACh. 1 - Prob. 3AACh. 1 - Prob. 1BTNCh. 1 - Prob. 2BTNCh. 1 - Prob. 5BTN
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