ACCT 211 Connect Homework Chapter 1 Exercises Liberty University Solution

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Question 1

Determine the missing amount from each of the separate situations given below.

Question 2

a. At the beginning of the year, Addison Company's assets are $163,000 and its equity is $122,250. During the year, assets increase $80,000 and liabilities increase $56,000. What is the equity at year-end?

Beginning

Change

Ending

Question 3

b. Office Store has assets equal to $229,000 and liabilities equal to $201,000 at year-end. What is the equity for Office Store at year-end?

Question 4

c. At the beginning of the year, Quaker Company's liabilities equal $41,000. During the year, assets increase by $60,000, and at year-end assets equal $190,000. Liabilities decrease $14,000 during the year. What are the beginning and ending amounts of equity?

Beginning

Change

Ending

Question 5

On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $83,220 in assets in exchange for its common stock to launch the business. On October 31, the company’s records show the following items and amounts.

Cash

Accounts receivable

Office supplies

Land

Office equipment

Accounts payable

Common Stock

Using the above information prepare an October income statement for the business.

ERNST CONSULTING

Income Statement

For Month Ended October 31

Revenues:

Consulting revenues

Expenses:

Rent expense

Salaries expense

Telephone expense

Miscellaneous expenses

Net income

Question 6

ERNST CONSULTING

Statement of Retained Earnings

For Month Ended October 31

Retained earnings, October 1

Add: Net income

Less: Dividends

Retained earnings, October 31

Question 7

ERNST CONSULTING

Balance Sheet

As of October 31

Assets

Cash

Accounts receivable

Office supplies

Land

Office Equipment

Total Assets

Question 8

Also assume the following:

The owner’s initial investment consists of $37,380 cash and $45,840 in land in exchange for its common stock..

The company’s $17,200 equipment purchase is paid in cash.

The accounts payable balance of $7,810 consists of the $2,530 office supplies purchase and $5,280 in employee salaries yet to be paid.

The company’s rent, telephone, and miscellaneous expenses are paid in cash.

No cash has been collected on the $12,000 consulting fees earned.

ERNST CONSULTING

Statement of Cash Flows

For Month Ended October 31

Cash flows from operating activities

Cash paid to employees

Cash paid for rent

Cash paid for telephone expenses

Cash paid for miscellaneous expenses

Net Cash used by operating activities

Cash flows from investing activities

Cash paid for office equipment

Net cash used by investing activities

Cash flows from financing activities

Cash investments from shareholders

Cash dividends to shareholders

Net cash provided by financing activities

Net increase in cash

Cash balance, October 1

Cash balance, October 31