The following financial statement information is from five s

The following financial statement information is from five separate companies: 1-2A Computing missi information usin accounting know A1 P1 Company Company Company Company Company December 31, 2014 $55,000 $34,000 $24,000 $60,000 19,000 21,500 9,000 December 31, 2015 Assets... 58000 26.500 113.000 70,000 29,000 During year 2015 9,750 6.500 20,000 11,000 1,400 8.500 3.500 14,000 Net income (loss) Owner cash withdrawals 40 Chapter 1 Accounting in Business 1. Answer the following questions about Company A: a. What is the amount of equity on December 31, 2014? b. What is the amount of equity on December 31, 2015? c. What is the amount of liabilities on December 31, 2015? Check (1l $41,500 2. Answer the following questions about Company B: a. What is the amount of equity on December 31, 2014? b. What is the amount of equity on December 31, 2015? c. What is net income for year 2015? 2c) $1,600 3. Calculate the amount of assets for Company C on December 31, 2015. 4. Calculate the amount of owner investments for Company D during year 2015. 5. Calculate the amount of liabilities for Company E on December 31, 2014. (3) $55,875

Solution

Equity, December 31, 2014

31-Dec-14

Calculation of Assets of 2015

31-Dec-14

31-Dec-15

31-Dec-15

31 December 2014

Solution:
1.a.	Company A Equity on December 31, 2014 is $30,500
Working Notes:
	Assets	=	Liabilities	+	Equity
	$55,000	=	$24,500	+	$30,500
	Assets = Liabilities + Equity
Hence
	Equity = Assets - Liabilities
	=$55,000 - $24,500
	=$30,500
1.b.	Company A Equity on December 31, 2015 is $41,500
Working Notes:
	Equity, December 31, 2014	$30,500
	Add: Net income 2015	8,500
	Add: Stock issuances	6,000
	Sub total	45000
	Less: Dividends	3,500
	Equity, December 31, 2015	$41,500
1.c.	Company A liabilities on December 31, 2015 is $16,500
Working Notes:
	Assets	=	Liabilities	+	Equity
	$58,000	=	$16,500	+	$41,500
	Assets = Liabilities + Equity
Hence
	Liabilities = Assets - Equity
	=$58,000 - $41,500
	=$16,500
2.a.	Company B Equity on December 31, 2014 is $12,500
Working Notes:
	Assets	=	Liabilities	+	Equity
	$34,000	=	$21,500	+	$12,500
	Assets = Liabilities + Equity
Hence
	Equity = Assets - Liabilities
	=$34,000 - $21,500
	=$12,500
2.b.	Company B Equity on December 31, 2015 is $13,500
Working Notes:
	Assets	=	Liabilities	+	Equity
	$40,000	=	$26,500	+	$13,500
	Assets = Liabilities + Equity
Hence
	Equity = Assets - Liabilities
	=$40,000 - $26,500
	=$13,500
2.c.	Company B net income for year 2015 = $1,600
	Equity, December 31, 2014	$12,500
	Add: Net income for 2015	1,600	Balancing figure
	Add: Stock issuances	1,400
		15500
	Less: Dividends	2,000
	Equity, December 31, 2015	$13,500
in other way you can see
	Net Income for 2015 = Equity for 2015 - Stock issuances in 2015 + Dividend paid in 2015 - Equity for 2014
	= $13,500 -1,400 + 2,000 - 12,500
	= $1,600
3.	Assets for Company C on December 31, 2015 = $55,875
Working Notes:
First step	Calculation of Equity on 31 December 2014
	31-Dec-14
	Assets	=	Liabilities	+	Equity
	$24,000	=	$9,000	+	$15,000
2nd step	Calculation of Equity of 2015 on 31 December
		Equity, December 31, 2014	$15,000
	Add: Net income	8,000
	Add: Stock issuances	9,750
		32750
	Less: Dividends	5,875
	Equity, December 31, 2015	$26,875
3rd Step	Calculation of Assets of 2015
	Assets	=	Liabilities	+	Equity
	55875	=	$29,000	+	$26,875
4.	Owner investments for Company D during 2015 = $27,000
Working Notes:
First step	Calculation of Equity on 31 December 2014
	31-Dec-14
	Assets	=	Liabilities	+	Equity
	$60,000	=	$40,000	+	$20,000
2nd step	Calculation of Equity on 31 December 2015
	31-Dec-15
	.	=	Liabilities	+	Equity
	$85,000	=	$24,000	+	$61,000
3rd Step	Calculation of Owner investment of 2015 on 31 December
		Equity, December 31, 2014	$20,000	a
	Add: Net income	14,000	b
	Add: Stock issuances	27,000	c=d-a-b
	Less: Dividends	0
	Equity, December 31, 2015	$61,000	d
5.	Liabilities for Company E on December 31, 2014 is $91,500
Working Notes:
First step	Calculation of Equity on 31 December 2015
	31-Dec-15
	Assets	=	Liabilities	+	Equity
	$113,000	=	$70,000	+	$43,000
	a		b		c=a-b
2nd step
	Calculation of Equity of 2014 on 31 December
		Equity, December 31, 2014	$27,500	a=e+d-c-d
	Add: Net income	20,000	b
	Add: Stock issuances	6,500	c
	Less: Dividends	11,000	d
	Equity, December 31, 2015	$43,000	e
3rd Step	Calculation of Equity on 31 December 2014
	31 December 2014
	Assets	=	Liabilities	+	Equity
	$119,000	=	$91,500	+	$27,500
	a		b=a-c		c
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