12th Edition

ISBN: 9781285637877

Author: NEEDLES

Publisher: Cengage

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The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business…

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Textbook Question

Chapter 1, Problem 4EA

Use the accounting equation to answer each question that follows. Show any calculations you make.

1. Oshkosh Company’s assets are $400,000, and its owner’s equity is $155,000. What is the amount of its liabilities?
2. Salvatore Company’s liabilities and owner’s equity are $72,000 and $79,500, respectively. What is the amount of the assets?
3. Radisson Company’s liabilities equal one-third of the total assets, and owner’s equity is $160,000. What is the amount of its liabilities?
4. At the beginning of the year, Sun Company’s assets were $275,000, and its owner’s equity was $150,000. During the year, assets increased $75,000 and liabilities decreased $22,500. What is the owner’s equity at the end of the year?

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Chapter 1, Problem 3EA

Chapter 1, Problem 5EA

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Chapter 1 Solutions

Principles Of Accounting

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Solution Summary: The author explains the accounting equation, which establishes the relationship between assets, liabilities, and owner's equity of an organization.

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