Chapter 2 week 1 E2-15

Chapter 2 week 1 E2-15 - element is a debit and which is a...

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E2-15. Link Back to Chapter 1 (Accounting Equation). Bob’s Cream Soda makes specialty soft drinks. At the end of 2008, Bob’s had total assets of $180,000 and liabilities totaling $100,000. Requirements 1. Write the company’s accounting equation, and label each amount as a debit or a credit. (pp. 67-68) 2. Bob’s total revenues for 2006 were $240,000, and total expenses for the year were $200,000. How much was Bob’s net income (or net loss) for 2008? Write the equation to compute the company’s net income, and indicate which
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Unformatted text preview: element is a debit and which is a credit. Does net income represent a net debit or a net credit? Review Exhibit 1-8, page 20, if needed. 1. Bob’s accounting equation is total assets of $180,000 (debit) = total liabilities of $100,000 (credit) + total owner’s equity of $80,000 (credit). 2. Bob’s net income was $40,000 for 2008. Bob’s total revenues of $240,000 (credit) –total expenses of $200,000 (debit) = net income of $40,000 (credit). Net credit...
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This note was uploaded on 06/13/2011 for the course ACC 205 taught by Professor Robertcarr during the Spring '10 term at Ashford University.

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