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ORIE_350_Homework__1__fall_2006 - ORIE 350 Fall 2006...

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ORIE 350 Fall 2006 Homework #1 Due September 5, 2006 1. Indicate what type each account is (A, L, or SE) and also indicate whether each account below would be shown on the income statement (I/S), balance sheet (B/S), or neither. a. Contributed Capital SE, B/S b. Fuel Expense SE, I/S c. Cash A, B/S d. Rent Expense SE, I/S e. Accounts Payable L, B/S f. Dividends SE, neither g. Net Sales Revenue SE, I/S h. Cost of Goods Sold SE, I/S i. Accounts Receivable A, B/S j. Retained Earnings SE, B/S 2. Use the accounting equation to answer each question below. a. The assets of Newport Corporation are $650,000, and the stockholder’s equity is $360,000. What is the amount of the liabilities? Liabilities=$650,000-360,000=$290,000 b. The liabilities and stockholder’s equity of Fitzgerald Corporation are $95,000 and $32,000 respectively. What is the amount of the assets? Assets=$95,000+32,000=$127,000 c. The liabilities of Emerald Corp. equals one-third of the total assets, and stockholder’s equity is $120,000. What is the amount of the liabilities? L=1/3A; SE=$120,000; 3L=L+120,000, Liabilities=$60,000 d. At the beginning of the year, Pickett Corporation’s assets were $220,000 and its stockholder’s equity was $100,000. During the year, assets increased $60,000 and liabilities decreased $10,000. What is the stockholder’s equity at the end of the year? A1=220k; SE1=100k; L1=120k; A2=280k; L2=110k; SE2=280k-110k=$170,000 3. On June 2, 2002, Superior Paper Corp. purchased 120 acres of land. The listing price of the land was $420,000, but Superior Paper Corp. negotiated a lower price and actually paid only $375,000. On August 25, 2005, the county reassessed the land and found that its value for tax purposes was $500,000. On July 26, 2006, Premium Cardboard Corporation offered to buy the land from Superior Paper for $840,000, but Superior Paper did not accept the offer. Superior Paper Corp. is preparing its financial accounting records for the end of its fiscal year on July 31, 2006.
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a) What amount should Superior Paper Corp. on its financial statements for this asset?
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