Mgmt 200 Assignment Soln 8-26-09

# Mgmt 200 Assignment Soln 8-26-09 - Retained Earnings Net...

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Management 200 – Introductory Financial Accounting– Fall 2009 Krannert School of Management - Purdue University Solutions to class assignment for August 26, 2009 Exercise 1-3 The Accounting Equation 1. A = L + OE 500,000 = 250,000 + OE OE = 250,000 2. A = L + OE (500,000 + 100,000) = (250,000 + 77,000) + OE OE = 273,000 3. A = L + OE A = (250,000 + 33,000) + (250,000*– 58,000) A = 283,000 + 192,000 A = 475,000 4. A = L + OE 1,000,000 = L + 250,000* L = 750,000 * From 1. above Exercise 1-8: Net Income (or loss) and retained earnings 1. Revenue Expenses = Net Income 25,000 (6,500 + 12,000) = 6,500 2. Retained

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Unformatted text preview: Retained Earnings Net Earnings Beginning of + Income – Dividends = End of Year Year 8,500 + 6,500 – 3,000 = 12,000 3. Total Assets: Cash \$ 13,000 Accounts receivable 4,500 Office equipment 7,500 Total assets \$ 25,000 4. Total Liabilities: Accounts payable \$ 5,000 5. Owners’ Equity: Capital stock + Retained earnings = Owners’ equity 8,000 + 12,000 = 20,000 (Or \$25,000 in total assets less \$5,000 in total liabilities.) 6. A = L + OE 25,000 = 5,000 + 20,000...
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## This note was uploaded on 01/29/2010 for the course MGMT 201 taught by Professor Rowe during the Spring '08 term at Purdue.

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Mgmt 200 Assignment Soln 8-26-09 - Retained Earnings Net...

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