Problem 1

Solution:
Beginning Capital (60K+120K+35K+270K-94K) 391,000
Net Income (Profit or Loss) Squeeze 130,000
Investments 70,000
Withdrawal (120,000)
Ending Capital (108K+181K+20K+300K-112K-26K) 471,000

Problem 2
Solution:
Increase in assets 3,560,000
Increase in liabilities (1,080,000)
Increase in share capital (2,400,000)
Increase in share premium (240,000)
Dividend payment 520,000
Net Income 360,000

Problem 3
Solution:
Cash 800,000
Accounts receivable (400,000)
Inventory 300,000
Equipment 950,000
Notes payable – bank (500,000)
Accounts payable 600,000
Share capital (700,000)
Share premium (300,000)
Dividend 1,500,000
Understatement of Ending Inventory 250,000
Net Income 2,500,000

Problem 4
Net Income (4,000,000 – 3,000,000) = 1,000,000

Capital, Jan. 1, 2020 7,500,000

Net Income 1,000,000
Dividend (300,000)
Capital, Dec. 31, 2020 8,200,000

Jan. 1, 2020 Dec. 31, 2020

Assets 8,600,000 9,400,000
Liabilities 1,100,000 1,200,000
Capital 7,500,000 8,200,000

Problem 5
Carrying Amount of PPE, beginning (145,000 - 58,000) 87,000
Cost of PPE Acquired 60,000
Carrying Amount of PPE Sold (30,000 - 12,000) (18,000)
Depreciation Expense - Squeeze (14,000)
Carrying Amount of PPE, ending (175,000 - 60,000) 115,000

Journal Entry Store equipment analysis

Cash 21,000 Beg. 145,000
Accumulated depreciation 12,000 Acquired (Squeeze) 60,000
Gain on sale 3,000 Sold (30,000)
Store Equipment 30,000 End 175,000