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Chapter_1_-_Class_Discussion_Solutions_Libby_4th_edition

# Chapter_1_-_Class_Discussion_Solutions_Libby_4th_edition -...

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E1–3 THE UNIVERSITY SHOP Income Statement For the Month of September 2012 Revenue from sales \$120,000 (*) Expenses: Cost of goods sold \$ 40,000 Salaries, rent, supplies, and other expenses 38,000 Utilities 600 Total expenses 78,600 Profit for the period \$ 41,400 (*) \$119,000 + \$1,000 = \$120,000. (Note: income taxes were ignored in this problem.)

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E1–6 A Profit = \$100,000 - \$82,000 = \$18,000 ; Shareholders’ Equity = \$150,000 - \$70,000 = \$80,000 . B Total Revenues = \$80,000 + \$12,000 = \$92,000 ; Total Liabilities = \$112,000 - \$60,000 = \$52,000 . C Profit (Loss) = \$80,000 - \$86,000 = (\$6,000) ; Shareholders’ Equity = \$104,000 - \$26,000 = \$78,000 . D Total Expenses = \$50,000 - \$13,000 = \$37,000 ; Total Assets = \$22,000 + \$77,000 = \$99,000 . E Total Revenues = \$81,000 - \$6,000 = \$75,000 ; Total Assets = \$73,000 + \$28,000 = \$101,000 .
E1–7 DUCHARME CORPORATION Summary Income Statement For the Month of January 2011 Total revenues \$150,000 Less: Total expenses (excluding income taxes) 100,000 Profit before income taxes 50,000 Less: Income tax expense 15,000 Profit for the year \$ 35,000 DUCHARME CORPORATION Statement of Financial Position As at January 31, 2011 Assets Cash \$20,000 Receivables from customers 25,000 Merchandise inventory 32,000 Total assets \$77,000 Liabilities and Shareholders’ Equity Liabilities: Payables to suppliers \$11,000 Income taxes payable 15,000 Total liabilities 26,000

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