HW #2 - Sarah Lowery June 22, 2011 951010439 Homework #2...

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Sarah Lowery June 22, 2011 951010439 Homework #2 Chapter 2 and 3 PA2-1 1. Lester’s Home and Healthcare Services is organized as a Sole Proprietorship because there is only one owner, Jennifer Lester. 2. Assets Liabilities Owner's Equity Cash Supplies Land Building Equipment Notes Payable J. Lester, Capital $ 40,000 $ 3,000 $ 12,000 $ 65,000 $ 16,000 $ 80,000 $ 40,000 $ (13,000) $ (4,000) $ (3,000) $ 4,000 $ 28,000 $ 3,000 $ 8,000 $ 65,000 $ 16,000 $ 80,000 $ 40,000 Total Assets= $120,000 Total Liabilities and Owner’s Equity= $120,000 3. Jennifer personally lent $5,000 to another business; this is not a business transaction so it is not recorded as such. 4. a. $120,000 b. $80,000 c. $40,000 d. $28,000 e. $31,000 (Cash plus Supplies is Current Assets) 5. Investment in assets has come primarily from owner’s equity in this case because Notes Payable has only $80,000 in it. There is a 2 to 1 ratio of liabilities to equity. PA2-3 1. Assets Liabiliti es Owner' Equity Cash Equipmen t Building Land Supplies Notes Payable Accounts Payable Nguyen, Capital Beg. $26,000 $118,000 $100,000 $200,000 $7,000 $2,000 $10,000 $439,00
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a) $400,000 $400,00 b) $90,000 $90,000 c) ($82,000) $182,000 $100,000 d) ($200,000 ) $200,000 e) $30,000 $30,000 $234,000 $318,000 $282,000 $200,000 $37,000 $2,000 $230,000 $839,00 Total Assets= $1,071,000 Total Liabilities and Owner's Equity= $1,071,000 2. Deliberate Speed Company Journal Entries July 1-31, 2011 Debit Credit a) Cash $ 400,000 A.N., Capital $ 400,000 b) Cash $ 90,000 Accounts Payable $ 90,000 c) Building $ 182,000 Cash $ 82,000 Accounts Payable $ 100,000 d) Equipment $ 200,000 Cash $ 200,000 e) Supplies $ 30,000 Accounts Payable $ 30,000 3. Deliberate Speed Company T-Accounts as of July 31, 2011 Cash Accounts Payable Building $ 26,000 $ 82,000 $ 10,000 $ 100,000 $ 400,000 $ 200,000 $ 90,000 $ 182,000 $ 90,000 $ 100,000 $ 30,000 $ 234,000 $ 230,000 $ 282,000 Equipme Supplies A.N., Capital
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nt $ 118,000 $ 7,000 $ 439,000 $ 200,000 $ 30,000 $ 400,000 $ 318,000 $ 37,000 $ 839,000 Land Notes Payable $ 200,000 $ 2,000 $ 200,000 $ 2,000 4. Deliberate Speed Company Balance Sheet At July 31, 2011 Assets Current Assets Cash $ 234,000 Supplies $ 37,000 Total Current Assets $ 271,000 Building $ 282,000 Equipment $ 318,000 Land $ 200,000 Total Assets $ 1,071,000 Liabilities and Owner's Equity Current Liabilities Accounts Payable $ 230,000 Total Current Liabilities $ 230,000 Notes Payable $ 2,000 Owner's Equity
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A.N., Capital $ 839,000 Total Liabilities and Owner's Equity $ 1,071,000 5. The financing for Deliberate Speed Company’s assets primarily comes from owner’s equity. PA2-4
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This note was uploaded on 02/26/2012 for the course ECON 421 taught by Professor Wilson during the Spring '12 term at University of Oregon.

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HW #2 - Sarah Lowery June 22, 2011 951010439 Homework #2...

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