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ACCT 203 HW Ch 1 solutions

ACCT 203 HW Ch 1 solutions - ACCT 203 HW Solutions

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Problem 1-1A (40 minutes) Part 1 Company A (a) Equity on December 31, 2008: Assets .......................................................... $33,000 Liabilities ..................................................... (27,060 ) Equity .......................................................... $ 5,940 (b) Equity on December 31, 2009: Equity, December 31, 2008 ........................ $ 5,940 Plus owner investments ............................ 6,000 Plus net income .......................................... 7,760 Less cash dividends .................................. (3,500 ) Equity, December 31, 2009 ....................... $16,200 (c) Liabilities on December 31, 2009: Assets .......................................................... $36,000 Equity .......................................................... (16,200 ) Liabilities ..................................................... $19,800 Part 2 Company B (a) and (b) Equity: 12/31/2008 12/31/2009 Assets ................................... $25,740 $25,920 Liabilities .............................. (18,018 ) (17,625 ) Equity ................................... $ 7,722 $ 8,295 (c) Net income for 2009: Equity, December 31, 2008 ..................... $ 7,722 Plus owner investments ......................... 1,400 Plus net income ....................................... ? Less cash dividends ............................... (2,000 ) Equity, December 31, 2009 ..................... $ 8,295
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Therefore, net income must have been $ 1,173
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Problem 1-1A (Continued) Part 3 Company C First, calculate the beginning balance of equity: Dec. 31, 2008 Assets .......................................................... $21,120 Liabilities ..................................................... (11,404 ) Equity .......................................................... $ 9,716 Next, find the ending balance of equity by completing this table: Equity, December 31, 2008 ........................ $ 9,716 Plus owner investments ............................ 9,750 Less net loss ............................................... (1,289) Less cash dividends .................................. (5,875 ) Equity, December 31, 2009 ........................ $12,302 Finally, find the ending amount of assets by adding the ending balance of equity to the ending balance of liabilities: Dec. 31, 2009 Liabilities ..................................................... $11,818 Equity .......................................................... 12,302 Assets .......................................................... $24,120
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