Homework SourseTodd Olson is the owner and operator of Alpha a motivational
Todd Olson is the owner and operator of Alpha, a motivational consulting business. At the end of its accounting period, December 31, 2013, Alpha has assets of $869,050 and liabilities of $274,620. Using the accounting equation and considering each case independently, determine the following amounts.
| a. | Todd Olson, capital, as of December 31, 2013. | $ |
| b. | Todd Olson, capital, as of December 31, 2014, assuming that assets increased by $137,310 and liabilities increased by $82,560 during 2014. | $ |
| c. | Todd Olson, capital, as of December 31, 2014, assuming that assets decreased by $68,650 and liabilities increased by $24,330 during 2014. | $ |
| d. | Todd Olson, capital, as of December 31, 2014, assuming that assets increased by $114,710 and liabilities decreased by $43,450 during 2014. | $ |
| e. | Net income (or net loss) during 2014, assuming that as of December 31, 2014, assets were $1,095,000, liabilities were $178,160, and there were no additional investments or withdrawals. | $ |
Solution
Solution:-
a:-
= Capital = Assets - Liabilities
= Capital = 869,050 - 274,620
= Capital = $ 594,430.
b:-
Closing captial = Opening capital +- Change in assets +- chang in liabilities
= 594,430 + 137,310 - 82,560
= $ 649,180.
c.
Closing captial = Opening capital +- Change in assets +- chang in liabilities
= 594,430 - 68,650 - 24,330
= $ 501,450.
d.
Closing captial = Opening capital +- Change in assets +- chang in liabilities
= 594,430 + 114,710 + 43,450
= $ 752,590.
e.
= 1,095,000 - 178,160 - 594,430
= $ 322,410 Net income
Please Rate or comment if you have any doubt regarding this solution.
