Prepare the financial report of Person A and Person J, and compare what it owns and owes on September 30, along with a list of any decisions made while preparing the report.

Question

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 1, Problem 6SDC

1.

To determine

Prepare the financial report of Person A and Person J, and compare what it owns and owes on September 30, along with a list of any decisions made while preparing the report.

1.

Expert Solution

Explanation of Solution

Balance Sheet: Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

The financial report that compares what A and J own and owe, could be the balance sheet as it summarizes the assets and the liabilities on a given date.

The comparisons were made on the basis of:

To estimate the net worth of both the individuals;
Use both the Historical Cost and Fair Value to make an acceptable comparison;
The potential assets have not been included in the report.

The Net worth of Person A as on September 30 is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$1,000
Art work	$800
Total assets (A)		$1,800
Liabilities
Liabilities
Loan payable	$250
Total liabilities (B)		$250
Net Worth (A−B)		$1,550

Table (1)

The Net worth of Person J as on September 30 is shown below:

Person J
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$6,000
Play Station Console	$250
Total assets (A)		$6,250
Liabilities
Liabilities
Tuition payable	$800
Loan payable	$4,800
Total liabilities (B)		$5,600
Net Worth (A−B)		$650

Table (2)

The Net worth of Person A as on September 30, based on fair value is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$1,000
Art work	$1,400
Total assets (A)		$2,400
Liabilities
Liabilities
Loan payable	$250
Total liabilities (B)		$250
Net Worth (A−B)		$2,150

Table (3)

The Net worth of Person J as on September 30, is shown below:

Person J
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$6,000
Play Station Console	$180
Total assets (A)		$6,180
Liabilities
Liabilities
Tuition payable	$800
Loan payable	$4,800
Total liabilities (B)		$5,600
Net Worth (A−B)		$580

Table (2)

2.

To determine

Identify the character that is better amongst Person A and Person J, and justify as a creditor to whom one would rather lend money.

2.

Expert Solution

Explanation of Solution

Identify the character that is better amongst A and J and justify as a creditor to whom one would rather lend money as follows:

The financial position of person A is better off than person J as has a greater net worth. Also being a creditor lending money to person A would be far more advisable as person A has greater ability to repay the loan and also has less amount of loan when compared to person J.

3.

To determine

Prepare the financial report that compares what person A and person J earned in October along with a list of any decisions made while preparing the report.

3.

Expert Solution

Explanation of Solution

Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

The above report was made on the following basis:

Income tax for both the individuals is not calculated;
Winning of lottery may not recur.

The Net income of person A in October, is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Revenues
Part Time Job (for October)		$1,500
Expenses
Rent expense (for October)	$470
Living expenses (for October)	$950
Total expenses		$1,420
Net income		$80

Table (5)

The Net income of person J in October is shown below:

J
Particulars	Amount ($)	Amount ($)
Revenues
Part Time Job (for October)		$1,950
Expenses
Rent expense (for October)	$800
Living expenses (for October)	$950
Total expenses		$1,750
Net income		$200

Table (6)

4.

To determine

Identify the successful character amongst person A and person J and justify as a creditor to whom one would rather lend money as a three year loan.

4.

Expert Solution

Explanation of Solution

Identify the successful character amongst person A and person J and justify as a creditor to whom one would rather lend money as a three year loan as follows:

Person J is more successful than person A in the month of October. However, being a creditor lending money to A would be far more advisable as person A has a stable income which ensures a greater ability to repay the loan and also has less amount of loan when compared to person J.

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 1, Problem 6SDC

1.

To determine

Prepare the financial report of Person A and Person J, and compare what it owns and owes on September 30, along with a list of any decisions made while preparing the report.

1.

Expert Solution

Explanation of Solution

Balance Sheet: Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

The financial report that compares what A and J own and owe, could be the balance sheet as it summarizes the assets and the liabilities on a given date.

The comparisons were made on the basis of:

To estimate the net worth of both the individuals;
Use both the Historical Cost and Fair Value to make an acceptable comparison;
The potential assets have not been included in the report.

The Net worth of Person A as on September 30 is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$1,000
Art work	$800
Total assets (A)		$1,800
Liabilities
Liabilities
Loan payable	$250
Total liabilities (B)		$250
Net Worth (A−B)		$1,550

Table (1)

The Net worth of Person J as on September 30 is shown below:

Person J
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$6,000
Play Station Console	$250
Total assets (A)		$6,250
Liabilities
Liabilities
Tuition payable	$800
Loan payable	$4,800
Total liabilities (B)		$5,600
Net Worth (A−B)		$650

Table (2)

The Net worth of Person A as on September 30, based on fair value is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$1,000
Art work	$1,400
Total assets (A)		$2,400
Liabilities
Liabilities
Loan payable	$250
Total liabilities (B)		$250
Net Worth (A−B)		$2,150

Table (3)

The Net worth of Person J as on September 30, is shown below:

Person J
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$6,000
Play Station Console	$180
Total assets (A)		$6,180
Liabilities
Liabilities
Tuition payable	$800
Loan payable	$4,800
Total liabilities (B)		$5,600
Net Worth (A−B)		$580

Table (2)

2.

To determine

Identify the character that is better amongst Person A and Person J, and justify as a creditor to whom one would rather lend money.

2.

Expert Solution

Explanation of Solution

Identify the character that is better amongst A and J and justify as a creditor to whom one would rather lend money as follows:

The financial position of person A is better off than person J as has a greater net worth. Also being a creditor lending money to person A would be far more advisable as person A has greater ability to repay the loan and also has less amount of loan when compared to person J.

3.

To determine

Prepare the financial report that compares what person A and person J earned in October along with a list of any decisions made while preparing the report.

3.

Expert Solution

Explanation of Solution

Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

The above report was made on the following basis:

Income tax for both the individuals is not calculated;
Winning of lottery may not recur.

The Net income of person A in October, is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Revenues
Part Time Job (for October)		$1,500
Expenses
Rent expense (for October)	$470
Living expenses (for October)	$950
Total expenses		$1,420
Net income		$80

Table (5)

The Net income of person J in October is shown below:

J
Particulars	Amount ($)	Amount ($)
Revenues
Part Time Job (for October)		$1,950
Expenses
Rent expense (for October)	$800
Living expenses (for October)	$950
Total expenses		$1,750
Net income		$200

Table (6)

4.

To determine

Identify the successful character amongst person A and person J and justify as a creditor to whom one would rather lend money as a three year loan.

4.

Expert Solution

Explanation of Solution

Identify the successful character amongst person A and person J and justify as a creditor to whom one would rather lend money as a three year loan as follows:

Person J is more successful than person A in the month of October. However, being a creditor lending money to A would be far more advisable as person A has a stable income which ensures a greater ability to repay the loan and also has less amount of loan when compared to person J.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 1, Problem 6SDC

1.

To determine

Prepare the financial report of Person A and Person J, and compare what it owns and owes on September 30, along with a list of any decisions made while preparing the report.

1.

Expert Solution

Explanation of Solution

Balance Sheet: Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

The financial report that compares what A and J own and owe, could be the balance sheet as it summarizes the assets and the liabilities on a given date.

The comparisons were made on the basis of:

To estimate the net worth of both the individuals;
Use both the Historical Cost and Fair Value to make an acceptable comparison;
The potential assets have not been included in the report.

The Net worth of Person A as on September 30 is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$1,000
Art work	$800
Total assets (A)		$1,800
Liabilities
Liabilities
Loan payable	$250
Total liabilities (B)		$250
Net Worth (A−B)		$1,550

Table (1)

The Net worth of Person J as on September 30 is shown below:

Person J
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$6,000
Play Station Console	$250
Total assets (A)		$6,250
Liabilities
Liabilities
Tuition payable	$800
Loan payable	$4,800
Total liabilities (B)		$5,600
Net Worth (A−B)		$650

Table (2)

The Net worth of Person A as on September 30, based on fair value is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$1,000
Art work	$1,400
Total assets (A)		$2,400
Liabilities
Liabilities
Loan payable	$250
Total liabilities (B)		$250
Net Worth (A−B)		$2,150

Table (3)

The Net worth of Person J as on September 30, is shown below:

Person J
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$6,000
Play Station Console	$180
Total assets (A)		$6,180
Liabilities
Liabilities
Tuition payable	$800
Loan payable	$4,800
Total liabilities (B)		$5,600
Net Worth (A−B)		$580

Table (2)

2.

To determine

Identify the character that is better amongst Person A and Person J, and justify as a creditor to whom one would rather lend money.

2.

Expert Solution

Explanation of Solution

Identify the character that is better amongst A and J and justify as a creditor to whom one would rather lend money as follows:

The financial position of person A is better off than person J as has a greater net worth. Also being a creditor lending money to person A would be far more advisable as person A has greater ability to repay the loan and also has less amount of loan when compared to person J.

3.

To determine

Prepare the financial report that compares what person A and person J earned in October along with a list of any decisions made while preparing the report.

3.

Expert Solution

Explanation of Solution

Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

The above report was made on the following basis:

Income tax for both the individuals is not calculated;
Winning of lottery may not recur.

The Net income of person A in October, is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Revenues
Part Time Job (for October)		$1,500
Expenses
Rent expense (for October)	$470
Living expenses (for October)	$950
Total expenses		$1,420
Net income		$80

Table (5)

The Net income of person J in October is shown below:

J
Particulars	Amount ($)	Amount ($)
Revenues
Part Time Job (for October)		$1,950
Expenses
Rent expense (for October)	$800
Living expenses (for October)	$950
Total expenses		$1,750
Net income		$200

Table (6)

4.

To determine

Identify the successful character amongst person A and person J and justify as a creditor to whom one would rather lend money as a three year loan.

4.

Expert Solution

Explanation of Solution

Identify the successful character amongst person A and person J and justify as a creditor to whom one would rather lend money as a three year loan as follows:

Person J is more successful than person A in the month of October. However, being a creditor lending money to A would be far more advisable as person A has a stable income which ensures a greater ability to repay the loan and also has less amount of loan when compared to person J.

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 1, Problem 6SDC

1.

To determine

Prepare the financial report of Person A and Person J, and compare what it owns and owes on September 30, along with a list of any decisions made while preparing the report.

1.

Expert Solution

Explanation of Solution

Balance Sheet: Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

The financial report that compares what A and J own and owe, could be the balance sheet as it summarizes the assets and the liabilities on a given date.

The comparisons were made on the basis of:

To estimate the net worth of both the individuals;
Use both the Historical Cost and Fair Value to make an acceptable comparison;
The potential assets have not been included in the report.

The Net worth of Person A as on September 30 is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$1,000
Art work	$800
Total assets (A)		$1,800
Liabilities
Liabilities
Loan payable	$250
Total liabilities (B)		$250
Net Worth (A−B)		$1,550

Table (1)

The Net worth of Person J as on September 30 is shown below:

Person J
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$6,000
Play Station Console	$250
Total assets (A)		$6,250
Liabilities
Liabilities
Tuition payable	$800
Loan payable	$4,800
Total liabilities (B)		$5,600
Net Worth (A−B)		$650

Table (2)

The Net worth of Person A as on September 30, based on fair value is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$1,000
Art work	$1,400
Total assets (A)		$2,400
Liabilities
Liabilities
Loan payable	$250
Total liabilities (B)		$250
Net Worth (A−B)		$2,150

Table (3)

The Net worth of Person J as on September 30, is shown below:

Person J
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$6,000
Play Station Console	$180
Total assets (A)		$6,180
Liabilities
Liabilities
Tuition payable	$800
Loan payable	$4,800
Total liabilities (B)		$5,600
Net Worth (A−B)		$580

Table (2)

2.

To determine

Identify the character that is better amongst Person A and Person J, and justify as a creditor to whom one would rather lend money.

2.

Expert Solution

Explanation of Solution

Identify the character that is better amongst A and J and justify as a creditor to whom one would rather lend money as follows:

The financial position of person A is better off than person J as has a greater net worth. Also being a creditor lending money to person A would be far more advisable as person A has greater ability to repay the loan and also has less amount of loan when compared to person J.

3.

To determine

Prepare the financial report that compares what person A and person J earned in October along with a list of any decisions made while preparing the report.

3.

Expert Solution

Explanation of Solution

Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

The above report was made on the following basis:

Income tax for both the individuals is not calculated;
Winning of lottery may not recur.

The Net income of person A in October, is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Revenues
Part Time Job (for October)		$1,500
Expenses
Rent expense (for October)	$470
Living expenses (for October)	$950
Total expenses		$1,420
Net income		$80

Table (5)

The Net income of person J in October is shown below:

J
Particulars	Amount ($)	Amount ($)
Revenues
Part Time Job (for October)		$1,950
Expenses
Rent expense (for October)	$800
Living expenses (for October)	$950
Total expenses		$1,750
Net income		$200

Table (6)

4.

To determine

Identify the successful character amongst person A and person J and justify as a creditor to whom one would rather lend money as a three year loan.

4.

Expert Solution

Explanation of Solution

Identify the successful character amongst person A and person J and justify as a creditor to whom one would rather lend money as a three year loan as follows:

Person J is more successful than person A in the month of October. However, being a creditor lending money to A would be far more advisable as person A has a stable income which ensures a greater ability to repay the loan and also has less amount of loan when compared to person J.

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Answer 5

Chapter 1, Problem 6SDC

1.

To determine

Prepare the financial report of Person A and Person J, and compare what it owns and owes on September 30, along with a list of any decisions made while preparing the report.

1.

Expert Solution

Explanation of Solution

Balance Sheet: Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

The financial report that compares what A and J own and owe, could be the balance sheet as it summarizes the assets and the liabilities on a given date.

The comparisons were made on the basis of:

To estimate the net worth of both the individuals;
Use both the Historical Cost and Fair Value to make an acceptable comparison;
The potential assets have not been included in the report.

The Net worth of Person A as on September 30 is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$1,000
Art work	$800
Total assets (A)		$1,800
Liabilities
Liabilities
Loan payable	$250
Total liabilities (B)		$250
Net Worth (A−B)		$1,550

Table (1)

The Net worth of Person J as on September 30 is shown below:

Person J
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$6,000
Play Station Console	$250
Total assets (A)		$6,250
Liabilities
Liabilities
Tuition payable	$800
Loan payable	$4,800
Total liabilities (B)		$5,600
Net Worth (A−B)		$650

Table (2)

The Net worth of Person A as on September 30, based on fair value is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$1,000
Art work	$1,400
Total assets (A)		$2,400
Liabilities
Liabilities
Loan payable	$250
Total liabilities (B)		$250
Net Worth (A−B)		$2,150

Table (3)

The Net worth of Person J as on September 30, is shown below:

Person J
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$6,000
Play Station Console	$180
Total assets (A)		$6,180
Liabilities
Liabilities
Tuition payable	$800
Loan payable	$4,800
Total liabilities (B)		$5,600
Net Worth (A−B)		$580

Table (2)

2.

To determine

Identify the character that is better amongst Person A and Person J, and justify as a creditor to whom one would rather lend money.

2.

Expert Solution

Explanation of Solution

Identify the character that is better amongst A and J and justify as a creditor to whom one would rather lend money as follows:

The financial position of person A is better off than person J as has a greater net worth. Also being a creditor lending money to person A would be far more advisable as person A has greater ability to repay the loan and also has less amount of loan when compared to person J.

3.

To determine

Prepare the financial report that compares what person A and person J earned in October along with a list of any decisions made while preparing the report.

3.

Expert Solution

Explanation of Solution

Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

The above report was made on the following basis:

Income tax for both the individuals is not calculated;
Winning of lottery may not recur.

The Net income of person A in October, is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Revenues
Part Time Job (for October)		$1,500
Expenses
Rent expense (for October)	$470
Living expenses (for October)	$950
Total expenses		$1,420
Net income		$80

Table (5)

The Net income of person J in October is shown below:

J
Particulars	Amount ($)	Amount ($)
Revenues
Part Time Job (for October)		$1,950
Expenses
Rent expense (for October)	$800
Living expenses (for October)	$950
Total expenses		$1,750
Net income		$200

Table (6)

4.

To determine

Identify the successful character amongst person A and person J and justify as a creditor to whom one would rather lend money as a three year loan.

4.

Expert Solution

Explanation of Solution

Identify the successful character amongst person A and person J and justify as a creditor to whom one would rather lend money as a three year loan as follows:

Person J is more successful than person A in the month of October. However, being a creditor lending money to A would be far more advisable as person A has a stable income which ensures a greater ability to repay the loan and also has less amount of loan when compared to person J.

Answer 6

Chapter 1, Problem 6SDC

1.

To determine

Prepare the financial report of Person A and Person J, and compare what it owns and owes on September 30, along with a list of any decisions made while preparing the report.

1.

Expert Solution

Explanation of Solution

Balance Sheet: Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

The financial report that compares what A and J own and owe, could be the balance sheet as it summarizes the assets and the liabilities on a given date.

The comparisons were made on the basis of:

To estimate the net worth of both the individuals;
Use both the Historical Cost and Fair Value to make an acceptable comparison;
The potential assets have not been included in the report.

The Net worth of Person A as on September 30 is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$1,000
Art work	$800
Total assets (A)		$1,800
Liabilities
Liabilities
Loan payable	$250
Total liabilities (B)		$250
Net Worth (A−B)		$1,550

Table (1)

The Net worth of Person J as on September 30 is shown below:

Person J
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$6,000
Play Station Console	$250
Total assets (A)		$6,250
Liabilities
Liabilities
Tuition payable	$800
Loan payable	$4,800
Total liabilities (B)		$5,600
Net Worth (A−B)		$650

Table (2)

The Net worth of Person A as on September 30, based on fair value is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$1,000
Art work	$1,400
Total assets (A)		$2,400
Liabilities
Liabilities
Loan payable	$250
Total liabilities (B)		$250
Net Worth (A−B)		$2,150

Table (3)

The Net worth of Person J as on September 30, is shown below:

Person J
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$6,000
Play Station Console	$180
Total assets (A)		$6,180
Liabilities
Liabilities
Tuition payable	$800
Loan payable	$4,800
Total liabilities (B)		$5,600
Net Worth (A−B)		$580

Table (2)

Answer 7

Chapter 1, Problem 6SDC

1.

To determine

Prepare the financial report of Person A and Person J, and compare what it owns and owes on September 30, along with a list of any decisions made while preparing the report.

Answer 8

1.

Expert Solution

Explanation of Solution

Balance Sheet: Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

The financial report that compares what A and J own and owe, could be the balance sheet as it summarizes the assets and the liabilities on a given date.

The comparisons were made on the basis of:

To estimate the net worth of both the individuals;
Use both the Historical Cost and Fair Value to make an acceptable comparison;
The potential assets have not been included in the report.

The Net worth of Person A as on September 30 is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$1,000
Art work	$800
Total assets (A)		$1,800
Liabilities
Liabilities
Loan payable	$250
Total liabilities (B)		$250
Net Worth (A−B)		$1,550

Table (1)

The Net worth of Person J as on September 30 is shown below:

Person J
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$6,000
Play Station Console	$250
Total assets (A)		$6,250
Liabilities
Liabilities
Tuition payable	$800
Loan payable	$4,800
Total liabilities (B)		$5,600
Net Worth (A−B)		$650

Table (2)

The Net worth of Person A as on September 30, based on fair value is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$1,000
Art work	$1,400
Total assets (A)		$2,400
Liabilities
Liabilities
Loan payable	$250
Total liabilities (B)		$250
Net Worth (A−B)		$2,150

Table (3)

The Net worth of Person J as on September 30, is shown below:

Person J
Particulars	Amount ($)	Amount ($)
Assets
Current Assets
Cash	$6,000
Play Station Console	$180
Total assets (A)		$6,180
Liabilities
Liabilities
Tuition payable	$800
Loan payable	$4,800
Total liabilities (B)		$5,600
Net Worth (A−B)		$580

Table (2)

Answer 9

1.

Expert Solution

Answer 10

1.

Expert Solution

Answer 11

Expert Solution

Answer 12

2.

To determine

Identify the character that is better amongst Person A and Person J, and justify as a creditor to whom one would rather lend money.

2.

Expert Solution

Explanation of Solution

Identify the character that is better amongst A and J and justify as a creditor to whom one would rather lend money as follows:

The financial position of person A is better off than person J as has a greater net worth. Also being a creditor lending money to person A would be far more advisable as person A has greater ability to repay the loan and also has less amount of loan when compared to person J.

Answer 13

2.

To determine

Identify the character that is better amongst Person A and Person J, and justify as a creditor to whom one would rather lend money.

Answer 14

2.

Expert Solution

Explanation of Solution

Identify the character that is better amongst A and J and justify as a creditor to whom one would rather lend money as follows:

The financial position of person A is better off than person J as has a greater net worth. Also being a creditor lending money to person A would be far more advisable as person A has greater ability to repay the loan and also has less amount of loan when compared to person J.

Answer 15

2.

Expert Solution

Answer 16

2.

Expert Solution

Answer 17

Expert Solution

Answer 18

3.

To determine

Prepare the financial report that compares what person A and person J earned in October along with a list of any decisions made while preparing the report.

3.

Expert Solution

Explanation of Solution

Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

The above report was made on the following basis:

Income tax for both the individuals is not calculated;
Winning of lottery may not recur.

The Net income of person A in October, is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Revenues
Part Time Job (for October)		$1,500
Expenses
Rent expense (for October)	$470
Living expenses (for October)	$950
Total expenses		$1,420
Net income		$80

Table (5)

The Net income of person J in October is shown below:

J
Particulars	Amount ($)	Amount ($)
Revenues
Part Time Job (for October)		$1,950
Expenses
Rent expense (for October)	$800
Living expenses (for October)	$950
Total expenses		$1,750
Net income		$200

Table (6)

Answer 19

3.

To determine

Prepare the financial report that compares what person A and person J earned in October along with a list of any decisions made while preparing the report.

Answer 20

3.

Expert Solution

Explanation of Solution

Income statement: Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

The above report was made on the following basis:

Income tax for both the individuals is not calculated;
Winning of lottery may not recur.

The Net income of person A in October, is shown below:

Person A
Particulars	Amount ($)	Amount ($)
Revenues
Part Time Job (for October)		$1,500
Expenses
Rent expense (for October)	$470
Living expenses (for October)	$950
Total expenses		$1,420
Net income		$80

Table (5)

The Net income of person J in October is shown below:

J
Particulars	Amount ($)	Amount ($)
Revenues
Part Time Job (for October)		$1,950
Expenses
Rent expense (for October)	$800
Living expenses (for October)	$950
Total expenses		$1,750
Net income		$200

Table (6)

Answer 21

3.

Expert Solution

Answer 22

3.

Expert Solution

Answer 23

Expert Solution

Answer 24

4.

To determine

Identify the successful character amongst person A and person J and justify as a creditor to whom one would rather lend money as a three year loan.

4.

Expert Solution

Explanation of Solution

Identify the successful character amongst person A and person J and justify as a creditor to whom one would rather lend money as a three year loan as follows:

Person J is more successful than person A in the month of October. However, being a creditor lending money to A would be far more advisable as person A has a stable income which ensures a greater ability to repay the loan and also has less amount of loan when compared to person J.

Answer 25

4.

To determine

Identify the successful character amongst person A and person J and justify as a creditor to whom one would rather lend money as a three year loan.

Answer 26

4.

Expert Solution

Explanation of Solution

Identify the successful character amongst person A and person J and justify as a creditor to whom one would rather lend money as a three year loan as follows:

Person J is more successful than person A in the month of October. However, being a creditor lending money to A would be far more advisable as person A has a stable income which ensures a greater ability to repay the loan and also has less amount of loan when compared to person J.

Answer 27

4.

Expert Solution

Answer 28

4.

Expert Solution

Answer 29

Expert Solution

Answer 30

Ch. 1 - Define accounting.Ch. 1 - Prob. 2Q Ch. 1 - Briefly distinguish financial accounting from...Ch. 1 - The accounting process generates financial reports...Ch. 1 - Explain what the separate entity assumption means...Ch. 1 - List the three main types of business activities...Ch. 1 - What information should be included in the heading...Ch. 1 - What are the purposes of (a) the balance sheet,...Ch. 1 - Explain why the income statement, statement of...Ch. 1 - Briefly explain the difference between net income...

Prepare the financial report of Person A and Person J, and compare what it owns and owes on September 30, along with a list of any decisions made while preparing the report.

Prepare the financial report of Person A and Person J, and compare what it owns and owes on September 30, along with a list of any decisions made while preparing the report.

Explanation of Solution

Identify the character that is better amongst Person A and Person J, and justify as a creditor to whom one would rather lend money.

Explanation of Solution

Prepare the financial report that compares what person A and person J earned in October along with a list of any decisions made while preparing the report.

Explanation of Solution

Identify the successful character amongst person A and person J and justify as a creditor to whom one would rather lend money as a three year loan.

Explanation of Solution

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