100 ending balance -$ 71 B u s i n e s s F i n a n c e
Check Please
2.
Basic computations. The following selected balances were extracted from
the accounting records of Rossi Enterprises on December 31, 20X3:
Accounts
Payable $ 3,200 Interest Expense $2,500
Accounts
Receivable 14,800 Land 18,000
Auto
Expense 1,900 Loan Payable 44,200
Building
32,200 Tax Expense 3,300
Cash 7,400 Utilities Expense 4,100
Fee
Revenue 60,100 Wage Expense 37,500
a.
Determine Rossi’s total assets as of December 31.$72,400
b.
Determine the company’s total liabilities as of December 31. $47,400
c.
Compute 20X3 net income or loss. $10,800
Revenue: 60,100
-Expenses: 49,300 = $10,800
5.
Accounting equation; analysis of owner’s equity. Sports car Repair
revealed the following financial data on January 1 and December 31 of the
current year.
Assets Liabilities
January
1 $46,500 $20,000
December
31 49,000 31,000
a.Compute the change in
owner’s equity during the year by using the accounting equation. Assets = Liabilities + Equity
January 1
$46,500 = $20,000 + $26,500
December
31 $49,000 = $31,000 + $18,000
= $8,500
Decrease
b.
Assume
that there were no owner investments or withdrawals during the year. What is
the probable cause of the change in owner’s equity from part (a)? Net Loss
c.Assume that there were no
owner investments during the year. If the owner withdrew $17,000, determine and
compute the company’s net income or net loss. Be sure to label your answer.
Beginning
Balance 26,500
Withdrawals
-17,000
Balance =
9,500
Ending
Balance= 18,000
Net
income = $ 8,500
d.
If
owner investments and withdrawals amounted to $13,000 and $2,000, respectively,
determine whether the company operated profitably during the year. Show
appropriate calculations.
Beginning
Balance 26,500 Net loss =
$19,500
Withdrawals
-2,000
Investments + 13,000
Balance = 37,500
End
Balance 18,000
8.
Financial statement relationships. The following information appeared on
the financial statements of the Altoona Repair Company:
Income
statement
Total
expenses $
65,900
Net
income 7,200
Statement
of owner’s equity
Beginning
owner’s equity balance $ 113,200
Owner
withdrawals 61,300
Ending
owner’s equity balance 71,150
Balance
sheet
Total
Liabilities $ 97,375
By
picturing the content of and the interrelationships among the financial
statements, determine the following:
a.
Total
revenues for the year-
Expenses ($65,900) + Net
income (7,200) = Revenue ($73,100)
b.
Total
owner investments
Beginning Balance $113,200
Withdrawals
$ – 61,300
= $51,900
Net Income + 7,200
= $59,100
Ending Balance -$71,150
Investments $12,050
c.
Total
assets
Assets = Liabilities +
Equity
Liabilities ($97,375) +
Equity ($71,150) = $168,525
Total Assets = $168,525
