Presentation on theme: "Ex. 126 At the beginning of the year, Yates Company had total assets of $1,050,000 and total liabilities of $600,000. Answer the following questions."— Presentation transcript:
1 Ex At the beginning of the year, Yates Company had total assets of $1,050,000 and total liabilities of $600,000. Answer the following questions viewing each situation as being independent of the others. (1) If total assets increased $350,000 during the year, and total liabilities decreased $150,000, what is the amount of owner's equity at the end of the year? (2) During the year, total liabilities increased $500,000 and owner's equity decreased $200,000. What is the amount of total assets at the end of the year? (3) If total assets decreased $90,000 and owner's equity increased $280,000 during the year, what is the amount of total liabilities at the end of the year?
2 Solution 126. (5 min. ). Total Assets. Total Liabilities Solution 126 (5 min.) Total Assets Total Liabilities Owner's Equity Beginning $1,050,000 $600,000 Change ,000 (150,000) Ending $1,400,000 – $450,000 = $950,000 (1) Total Assets Total Liabilities Owner's Equity Beginning $1,050,000 $ 600,000 $450,000 Change ,000 (200,000) Ending $1,350,000 (2) = $1,100,000 + $250,000 Total Assets Total Liabilities Owner's Equity Beginning $1,050,000 $600,000 $450,000 Change (90,000) ,000 Ending $ 960,000 = $230,000 (3) + $730,000
3 Ex. 139Prepare an income statement, an owner's equity statement, and a balance sheet for the dental practice of Carl Craft, DDS, from the items listed below for the month of September.Carl Craft, Capital, September 1 $40,000Accounts payable 7,000Equipment 30,000Service revenue 24,000Carl Craft, Drawings 5,000Dental supplies expense 3,500Cash 6,000Utilities expense 700Dental supplies 2,800Salaries expense 7,000Accounts receivable 14,000Rent expense 2,000CARL CRAFT, DDSIncome Statement and Statement of owners equity and Balance SheetFor the Month Ended September 30, 2002
4 CARL CRAFT, DDSIncome StatementFor the Month Ended September 30, 2002RevenuesService revenue $24,000ExpensesSalaries expense $7,000Dental supplies expense 3,500Rent expense 2,000Utilities expenseTotal expenses ,200Net income $10,800
5 CARL CRAFT, DDSOwner's Equity StatementFor the Month Ended September 30, 2002Carl Craft, Capital, September 1 $40,000Add: Net income ,80050,800Less: Drawings ,000Carl Craft, Capital, September 30 $45,800
6 CARL CRAFT, DDSBalance SheetSeptember 30, 2002AssetsCash $ 6,000Accounts receivable 14,000Dental supplies 2,800Equipment ,000Total assets $52,800Liabilities and Owner's EquityLiabilitiesAccounts payable $ 7,000Owner's EquityCarl Craft, Capital ,800Total liabilities and owner's equity $52,800