MBAPA2-1 - separate entity assumption implies this...

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PA2-1 Req. 1 Assets = Liabilities + Stockholders' Equity Cash Equipment Building Notes Payable Contributed Capital Retained Earnings (a) +100,000 = +100,000 (b) +120,000 = +120,000 (c) –200,000 +200,000 = (d) –3,000 +30,000 = +27,000 (e) –3,000 = –3,000 (f) –5,000 +10,000 = +5,000 (g) No effect = +12,000 +37,000 +200,000 = +149,000 +100,000 Changes + $249,000 + $149,000 +$100,000 Req. 2 The transaction between the stockholder and his neighbor (event g ) was not included in the spreadsheet. Because event (g) occurs between the owners and others, the
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Unformatted text preview: separate entity assumption implies this transaction does not affect the business. Req. 3 (a) Beginning total assets $500,000 + Changes $249,000 = $749,000 Ending total assets (b) Beginning total liabilities $200,000 + Changes $149,000 = $349,000 Ending total liabilities (c) Ending total assets $749,000 – Ending total liabilities $349,000 = Ending stockholders’ equity $400,000...
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This note was uploaded on 06/27/2008 for the course MBA BUS511 taught by Professor Nia during the Summer '08 term at Glasgow Caledonian University.

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