Professional Documents
Culture Documents
Chapter 1 Vol 5 Assets
Chapter 1 Vol 5 Assets
Problem 1: Solution
Problem 2: Solution
Daytime Café
Balance Sheet
December 31, 20X6
ASSETS
Current Assets:
Cash $ 15,000
Accounts Receivable 6,000
Inventories 30,000
Prepaid Insurance 10,000
Total Current Assets 61,000
Property and Equipment:
Land 600,000
Buildings 600,000
Equipment 300,000
Less: Accumulated Depreciation (100,000)
Net Property and Equipment 1,400,000
Total Assets $1,461,000
Problem 3: Solution
OWNERS' EQUITY
5% Cumulative Preferred Stock, $1 par
value, authorized 50,000 shares;
issued and outstanding 10,000 shares $ 500,000 (1)
Common Stock, $1 par value, authorized
100,000 shares; issued and outstanding
20,000 shares 500,000 (2)
Retained Earnings 175,000 (3)
Total Owners' Equity $1,175,000
Problem 7: Solution
Problem 8: Solution
($2,000,000 - 0) / 5 = $400,000
Spartan Inn
Balance Sheet
December 31, 20X4
Assets
Current Assets
Cash $ 5,000
Marketable securities 25,000
Accounts receivable 80,000
Inventories 15,000
Prepaid expenses 8,000
Total Current Assets $133,000
Property and Equipment
Land 80,000
Building 500,000
Furnishings and equipment 200,000
Less: Accumulated depreciation 150,000
Net property and equipment 630,000
Other Assets
Other—franchise fees 15,000
Total Assets $778,000
KRS, Inc.
Comparative Balance Sheets
December 31, 20X2 and 20X1
Liabilities
Current Liabilities
Accounts Payable $ 12,945 $ 13,265 $ (320) -2.41%
Accrued Expenses 1,039 2,047 (1,008) -49.24
Current Portion of
Long-Term Debt 20,060 20,407 (347) -1.70
Total 34,044 35,719 (1,675) -4.69
Owners' Equity
Common Stock 211,200 211,200 -0- 0.00
Retained Earnings 149,380 192,853 (43,473) -22.54
1. $51,000
2. $30,500
3. $30,500 - $51,000 = ($20,500)
4. $8,000
5. $8,000
6. $325,000 - $64,000 = $261,000
7. $8,000 + $80,500 = $88,500
Problem 13: Solution
1. -$2,000
2. $20,000
3. $140,000
4. $180,000
5. $5,000
6. $18,700
7. $11,700
8. $8,700
Assets
Current Assets:
Cash $ 5,000
Marketable securities 10,000
Accounts receivable (net) 90,000
Food inventory 15,000
Prepaid expenses 9,000
Total current assets 129,000
Investments 50,000
Property and Equipment
Land 80,000
Building 420,000
Equipment 100,000
Less Accumulated depreciation (141,000)
Net property and equipment 459,000
Total Assets $638,000
Key: Notice that the demand deposit of $60 is .6% of total assets;
therefore, total assets equals $10,000.
Problem 18: Solution
Gordon Lodge
Balance Sheet
December 31, 20X1 and 20X2
LTD:
Mortgage Payable $ 200,000 $ 180,000 $(20,000) 40.0%
Deferred Taxes 80,000 80,000 - 16.0
Total 280,000 260,000 (20,000) 56.0
Owners’ Equity:
Common Stock $ 150,000 $ 160,000 $ 10,000 30.0%
Retained Earnings 60,000 80,000 20,000 12.0
Treasury Stock (10,000) (10,000) -0- (2.0)
Total 200,000 230,000 30,000 40.0
Total Liabilities
and Owners’ Equity $ 500,000 $ 508,000 $ 8,000 100.0%
Longstreth Lodge
Balance Sheet
December 31, 20X1 and 20X2
Common-
December 31 Percentage Size
20X1 20X2 Difference 12/31/X2
Current Assets:
Cash $ 800 $ 1,000 25.0% 0.2%
Accounts Receivable 30,000 27,500 -8.3% 5.0%
Inventories 500 550 10.0% 0.1%
Prepaid Expenses 5,000 5,500 10.0% 1.0%
Total Current
Assets 36,300 34,550 -4.8% 6.3%
Base-Year Comparisons
Current Assets
Wyoming Inn