name : Sara Najjar

exercise
2.1
Deep River Lodge
Balance Sheet
31-Dec-11
Assets Liabilities & owner's equity
Cash $ 9,100 Accounts Payable $ 27,400
Accounts Receivable 3,300 Notes Payable 217,000
Land 140,000 Interest Payable 4,000
Buildings 430,000 Salaries Payable 13,200
Equipment 9,000 Total Liabilities $ 261,600
Furnishings 22,600 Capital Stock $ 150,000
Retained Earnings 202,400
Total Owner's Equity $ 352,400

Total Assets $ 614,000 Total Liabilities & owner's equity $ 614,000

b) The company has cash available in hand 9,100 $ which is less than the salaries payable
so the company does not have enough liquidity to pay its own employees that means its
financial position is weak.

2.2
a) 1.Purchased furniture for cash at a cost of $800
2. Collected 500$ cash on account
3. Purchased 5000$ of furniture , paid 3000$ as cash the rest is on account.
4. Paid 2000$ cash from accounts payable
5.sold capital stock to owners for 10000$
6.Purshased furniture on account for 3000$

2.3
Assets Liabilities + owner's equity
office Notes Accounts
cash + land + building + equipment payable + Payable + Capital Stock
$12,000 $80,000 $66,000 $41,300 $42,000 $7,300 $150,000
$40,000 $40,000
$52,000 $80,000 $66,000 $41,300 $42,000 $7,300 $190,000
($10,000) $30,000 $50,000 $70,000
$42,000 $110,000 $116,000 $41,300 $112,000 $7,300 $190,000
$8,000 $8,000
$42,000 $110,000 $116,000 $49,300 $112,000 $15,300 $190,000
$12,000 $12,000
$54,000 $110,000 $116,000 $49,300 $124,000 $15,300 $190,000
($4,000) ($4,000)
$50,000 $110,000 $116,000 $49,300 $124,000 $11,300 $190,000
 2.4
Assets Liabilities + owner's equity
office Notes Accounts
cash + A/R + Trucks + equipment payable + Payable + Capital Stock
$4,700 $8,300 $72,000 $3,000 $10,000 $8,000 $70,000
($2,600) $2,600
$2,100 $8,300 $72,000 $5,600 $10,000 $8,000 $70,000
$2,500 ($2,500)
$4,600 $5,800 $72,000 $5,600 $10,000 $8,000 $70,000
($2,000) ($2,000)
$2,600 $5,800 $72,000 $5,600 $10,000 $6,000 $70,000
$5,000 $5,000
$7,600 $5,800 $72,000 $5,600 $15,000 $6,000 $70,000
($5,000) $60,000 $55,000
$2,600 $5,800 $132,000 $5,600 $70,000 $6,000 $70,000
$25,000 $25,000
$27,600 $5,800 $132,000 $5,600 $70,000 $6,000 $95,000

2.5

Circus World
Balance Sheet
June 30,2011
Assets Liabilities & owner's equity
Cash $ 9,150 Accounts Payable $ 25,000
Accounts Receivable 5,600 Notes Payable 115,000
Notes Receivable 1,200 Salaries Payable 1,250
Animals 310,000 Total Liabilities $ 141,250
Cages 15,000 Capital Stock $ 400,000
Costumes 16,000 Retained Earnings 89,000
Props and Equipment 108,000 Total Owner's Equity $ 489,000
Tents 40,000
Trucks & Wagons 125,300
Total Assets $ 630,250 Total Liabilities & owner's equity $ 630,250

b) the tent accounts will become 30,000$ and the retained earnings account will become
79,000$.

2.6
Apple Valley Farms
Balance Sheet
September 30,2011
Assets Liabilities & owner's equity
Cash $9,300 Accounts Payable $8,100
Accounts Receivable 15,000 Notes Payable 65,000
Land 50,000 Wages Payable. 1,200
Barns and Sheds 19,100 Property Taxes Payable 4,700
Apple Trees 84,000 Total Liabilities $79,000
Fences and Gates 14,100 Capital Stock 100,000
Irrigation System 10,200 Retained Earnings 47,700
Livestock 5,000 Total Owner's Equity $ 147,700
Farm Machinery 20,000
Total Assets $ 226,700 Total Liabilities & owner's equity $226,700

b) the barn and sheds account will become 14,600$ and the retained earnings account will
decrease to 43,200$.

2.7
The City Butcher
Balance Sheet
July1,2011
Assets Liabilities & owner's equity
Cash $4,100 Accounts Payable. $7,000
Accounts Receivable 8,200 Notes Payable 40,000
Land 50,000 Salaries Payable 3,700
Building 90,000 Total Liabilities $50,700
Supplies 7,000 Capital Stock $100,000
Equipment and Fixtures 25,000 Retained earnings 33,600
Total Owner's Equity $136,600
Total Assets $184,300 Total Liabilities & owner's equity $184,300

The City Butcher

Balance Sheet
July5,2011
Assets Liabilities & owner's equity
Cash $26,100 Accounts Payable. $6,000
Accounts Receivable 8,200 Notes Payable 40,000
Land 50,000 Salaries Payable 3,700
Building 90,000 Total Liabilities $49,700
Supplies 8,000 Capital Stock $130,000
Equipment and Fixtures 31,000 Retained earnings 33,600
Total Owner's Equity $163,600
Total Assets $213,300 Total Liabilities & owner's equity $213,300

c) since the cash is fine and can pay the salaries the financial state is okey for now but the company has to sell
more stocks to be able to stay in the safe area. July 5 is better than july 1

2.8
The Candy Shop
Balance Sheet
Sptember30,2011
Assets Liabilities & owner's equity
Cash $6,900 Accounts Payable $6,800
Accounts Receivable 5,000 Notes Payable 50,000
Building 80,000 Total Liabilities $56,800
Land 72,000 Capital Stock $100,000
Furniture and Fixtures 9,000 Retained Earnings 19,100
Supplies 3,000 Total Owner's Equity $119,100
Total Assets $175,900 Total Liabilities & owner's equity $175,900

The Candy Shop

Balance Sheet
October6,2011
Assets Liabilities & owner's equity
Cash $ 34,000 Accounts Payable $8,000
Accounts Receivable 5,000 Notes Payable 50,000
Building 80,000 Total Liabilities $58,000
Land 72,000 Capital Stock $130,000
Furniture and Fixtures 17,000 Retained Earnings 23,900
Supplies 3,900 Total Owner's Equity $153,900
Total Assets $211,900 Total Liabilities & owner's equity $211,900

b)
The Candy Shop
Income Statement
October6,2011
Sales Revenue $8,000
Operating Expenses
sales Expenses $3,200
Net Income $5,200

c) Since cash has increased in oct 6 and capital stock also has increased the financial position is better in october 6
mpany has to sell
is better in october 6