December 31 Total Assets Total Liabilities

Download as xlsx, pdf, or txt
Download as xlsx, pdf, or txt
You are on page 1of 5

Ex.

202
The Constantine Company had the following assets and liabilities on the dates indicated.
December 31 Total Assets Total Liabilities
2015 $480,000 $250,000
2016 $460,000 $220,000
2017 $590,000 $300,000
Constantine began business on January 1, 2015, with an investment of $100,000.
Instructions
From an analysis of the change in owner’s equity during the year, compute the net income (or
loss) for:
(a) 2015, assuming Constantine’s drawings were $45,000 for the year.
(b) 2016, assuming Constantine made an additional investment of $50,000 and had no drawings in 2016.
(c) 2017, assuming Constantine made an additional investment of $15,000 and had drawings of $40,000 in 2017.
Ex. 203
For each of the following, indicate whether the transaction affects revenue (R), expense (E), owner's drawing (D), owner's i
Answer 203
1.Made an investment to start the business. I Increase in owner's investment
2.Billed customers for services performed. R Increase in Revenue
3.Purchased equipment on account. NOE
4.Paid monthly rent. E Increase in Expenses
5.Withdrew cash for personal use. D Increase in owner's drawings
Ex. 204
Presented below is a balance sheet for Mark Bledsoe Yard Service at December 31, 2016.
MARK BLEDSOE YARD SERVICE
Balance Sheet Cash
December 31, 2016 AR
AssetsLiabilities and Owner's Equity AP
Cash$13,000Liabilities Supplies
Accounts receivable6,000Accounts payable$ 8,000 Note p
Supplies9,000Notes payable15,000 Equipment
Equipment11,000Owner's equity Owner eq
     Owner’s capital  16,000
Total assets$39,000Total liabilities & owner’s equity$39,000
The following additional data are available for the year
which began on January 1: All expenses (excluding
supplies expense) total $6,000. Supplies on January 1,
were $11,000 and $7,000 of supplies were purchased
during the year. Net income for the year was $8,000 and
drawings were $9,000.
Instructions
Determine the following:  (Show all computations.) exp
1.Supplies used during the year.
2.Total expenses for the year.
3.Service revenues for the year.
4.Owner’s capital balance on January 1.
Answer 202
(a) 2015, assuming Constantine’s drawings we
Ending Equity
less : Beginning Equity
add: drawings
Net Income

(b) 2016, assuming Constantine made an add


Ending Equity
less : Beginning Equity
wings in 2016. add: drawings
gs of $40,000 in 2017. less: additional investment
Net Income/(loss)
owner's drawing (D), owner's investment (I), or no effect on owner's equity (NOE).

(c) 2017, assuming Constantine made an addi


Ending Equity
less : Beginning Equity
add: drawings
less: additional investment
Net Income/(loss)

$ 13,000
$ 6,000 Answer 204-1
8000 Supplies used
$ 9,000 beginning
15000 add: purchases
$ 11,000 less: ending
16000 Supplies used
$ 39,000 39000
Answer 204-2

Supplies used
all other expenses
$ 6,000 Total expenses

Answer 204-3
Net Income
add: total expenses
Service Revenues for the year
Answer 204-4
Ending owner's capital
add: drawings
less: net income
Beginning Balance
nstantine’s drawings were $45,000 for the year.
$ 230,000 (Total assets $ 480,000 less Total Liabilities $ 250,000)
$ 100,000
$ 45,000
$ 175,000

nstantine made an additional investment of $50,000 and had no drawings in 2016.


$ 240,000 (Total assets $ 460,000 less Total Liabilities $ 250,000)
$ 230,000
$ -
$ 50,000
$ -40,000

nstantine made an additional investment of $15,000 and had drawings of $40,000 in 2017.
$ 290,000
$ 240,000
$ 40,000
$ 15,000
$ 75,000

$ 11,000
$ 7,000
$ 9,000
$ 9,000

$ 9,000
$ 6,000
$ 15,000

$ 8,000
$ 15,000
$ 23,000
$ 16,000
$ 9,000
$ 8,000
$ 17,000

You might also like