WI18ACCT110VO1 Financial Accounting Home My courses W118

WI18.ACCT.110.VO1 - Financial Accounting | Home / My courses / W118.ACCT.110.01 / January 8 - January 14 / Chapter 1 Assignment Dropbox (Graded) Chapter 1 Assignment Dropbox (Graded) Please submit your Chapter 1 Homework Assignment by using the template provided and uploading it to this drop box. Complete the following homework assignment for this module: • Ex 1-5: Accounting Equation (page 36) Ex 1-6: Accounting Equation (page 36) • Ex 1-8: Asset, liability, and stockholders\' equity items (page 37) Ex 1-9: Effect of transactions on accounting equation (page 37). • Ex 1-11: Effect of transactions on stockholders\' equity (page 37) • Ex 1-18: Retained earnings statement (page 39) • Ex 1-19: Income Statement (page 39) . Ex 1-21: Balance sheets, net income (page 40)

Solution

Answer to Question No. EX 1-20:

FREEMAN:

Beginning of the year:
Assets = Liabilities + Stockholders’ Equity
$900,000 = $360,000 + Stockholders’ Equity
Stockholders’ Equity = $540,000

End of the year:
Assets = Liabilities + Stockholders’ Equity
$1,260,000 = $330,000 + Stockholders’ Equity
Stockholders’ Equity = $930,000

Net Income = Revenue – Expenses
Net Income = $570,000 - $240,000
Net Income = $330,000

Ending Stockholders’ Equity = Beginning Stockholders’ Equity + Additional Common Stock issued + Net Income – Dividends
$930,000 = $540,000 + Additional Common Stock Issued + $330,000 - $75,000
$930,000 = $795,000 + Additional Common Stock Issued
Additional Common Stock Issued = $135,000

HEYWARD:

Beginning of the year:
Assets = Liabilities + Stockholders’ Equity
$490,000 = $260,000 + Stockholders’ Equity
Stockholders’ Equity = $230,000

End of the year:
Assets = Liabilities + Stockholders’ Equity
$675,000 = $220,000 + Stockholders’ Equity
Stockholders’ Equity = $455,000

Ending Stockholders’ Equity = Beginning Stockholders’ Equity + Additional Common Stock issued + Net Income – Dividends
$455,000 = $230,000 + $150,000 + Net Income - $32,000
$455,000 = $348,000 + Net Income
Net Income = $107,000

Net Income = Revenue – Expenses
$107,000 = Revenue - $128,000
Revenue = $235,000

JONES:

Beginning of the year:
Assets = Liabilities + Stockholders’ Equity
$115,000 = $81,000 + Stockholders’ Equity
Stockholders’ Equity = $34,000

End of the year:
Assets = Liabilities + Stockholders’ Equity
$100,000 = $800,000 + Stockholders’ Equity
Stockholders’ Equity = $20,000

Net Income = Revenue – Expenses
Net Income = $115,000 - $122,500
Net Income = $7,500

Ending Stockholders’ Equity = Beginning Stockholders’ Equity + Additional Common Stock issued + Net Income – Dividends
$20,000 = $34,000 + $10,000 + $7,500 – Dividend
$20,000 = $51,500 – Dividend
Dividend = $31,500

RAMIREZ:

End of the year:
Assets = Liabilities + Stockholders’ Equity
$270,000 = $136,000 + Stockholders’ Equity
Stockholders’ Equity = $134,000

Net Income = Revenue – Expenses
Net Income = $115,000 - $128,000
Net Income = $13,000 (Loss)

Ending Stockholders’ Equity = Beginning Stockholders’ Equity + Additional Common Stock issued + Net Income – Dividends
$134,000 = Beginning Stockholders’ Equity + $55,000 - $13,000 - $39,000
$134,000 = Beginning Stockholders’ Equity + $3,000
Beginning Stockholders’ Equity = $131,000

Beginning of the year:
Assets = Liabilities + Stockholders’ Equity
Assets = $120,000 + $131,000
Assets = $251,000