Chapter 1-solution of assigned problems

Chapter 1-solution of assigned problems - Chapter 1...

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Chapter 1 Financial Statements and Business Decisions E1–2 L (1) Accounts payable A (2) Accounts receivable A (3) Cash and cash equivalents E (4) Cost of products sold A (5) Property, plant and equipment E (6) Income taxes E (7) Interest expense A (8) Inventories A (9) Land E (10) Marketing, administrative, and other operating expenses L (11) Long-term debt R (12) Net sales L (13) Notes payable SE (14) Retained earnings L (15) Taxes payable E1–5 Req. 1 READ MORE STORE Balance Sheet As at December 31, 2006 ASSETS LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities Cash $ 42,900 Accounts payable $ 8,000 Accounts receivable 36,000 Note payable 1,000 Store and office equipment 43,000 Interest payable 120 Total liabilities 9,120 Shareholders’ Equity
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Share capital 100,000 Retained earnings 12,780 Total shareholders’ equity 112,780 Total assets $121,900 Total liabilities and shareholders' equity $121,900 Req. 2 This is the first year of operations. Net income for the year was $12,780 and no dividends were declared. Therefore, the balance of retained earnings ($12,780) at year end consists entirely of the net income earned during the first year. E1–8 HOME REALTY, INCORPORATED Income Statement For the Year Ended December 31, 2006 Revenue: Commissions earned ($150,000 + $16,000) $166,000 Rental service fees 15,000 Total revenues $181,000 Expenses: Salaries $ 62,000 Commissions 35,000 Payroll tax 2,500
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Chapter 1-solution of assigned problems - Chapter 1...

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