Four different sole proprietorships, A, B, C, and D, show the same balance sheet data at

the beginning and end of a year. These data, exclusive of the amount of owner’s equity,
are summarized as follows:
Total
assets Total
liabilities
Beginning of the year Br410,000 Br180,000
End of the year 505,000 250,000
Based on the above data and the following additional information for the year,
determine the net income (or loss) of each company for the year.
Company A: The owner had made no additional investments in the business and had
made no withdrawals from the business.
Company B: The owner had made no additional investments in the business but had
withdrawn Br30,000.
Company C: The owner had made an additional investment of Br35,000 but had made
no withdrawals.
Company D: The owner had made an additional investment of Br35,000 and had
withdrawn Br30,000.

ChatGPT
Poe
To determine the net income (or loss) for each company, we need to analyze the
changes in their total assets and total liabilities from the beginning to the end of the
year. Net income is calculated as the increase in owner's equity during the year.
Let's calculate the net income for each company:
Company A:
Total assets increased from Br410,000 to Br505,000, and total liabilities increased from
Br180,000 to Br250,000. To calculate the net income, we need to find the change in
owner's equity. Since the owner made no additional investments or withdrawals, the
change in owner's equity is equal to the net income.
Net income for Company A = Total assets at the end of the year - Total liabilities at the
end of the year
= Br505,000 - Br250,000
= Br255,000
Company B:
Total assets increased from Br410,000 to Br505,000, and total liabilities increased from
Br180,000 to Br250,000. The owner made a withdrawal of Br30,000, which reduces the
change in owner's equity.
Net income for Company B = Total assets at the end of the year - Total liabilities at the
end of the year - Owner's withdrawal
= Br505,000 - Br250,000 - Br30,000
= Br225,000
Company C:
Total assets increased from Br410,000 to Br505,000, and total liabilities increased from
Br180,000 to Br250,000. The owner made an additional investment of Br35,000, which
increases the change in owner's equity.
Net income for Company C = Total assets at the end of the year - Total liabilities at the
end of the year + Owner's additional investment
= Br505,000 - Br250,000 + Br35,000
= Br290,000
Company D:
Total assets increased from Br410,000 to Br505,000, and total liabilities increased from
Br180,000 to Br250,000. The owner made an additional investment of Br35,000 and a
withdrawal of Br30,000.
Net income for Company D = Total assets at the end of the year - Total liabilities at the
end of the year + Owner's additional investment - Owner's withdrawal
= Br505,000 - Br250,000 + Br35,000 - Br30,000
= Br260,000
So, the net income (or loss) for each company is as follows:
Company A: Br255,000
Company B: Br225,000
Company C: Br290,000
Company D: Br260,000

What is operating activities, investing activities, financing activities in accounting explain

within examples

Operating activities, investing activities, and financing activities are the three main categories
used in accounting to classify the cash flows of a business. Let me explain each category with
examples.
1. Operating activities: These are the day-to-day activities that generate revenue for a
business. Examples of operating activities include:
 Sales of goods or services: When a company sells its products or services, the cash
received from customers is considered an operating activity.
  Payment of wages and salaries: When employees are paid for their work, the cash
outflow is classified as an operating activity.
 Payment of suppliers and vendors: When a business pays its suppliers or vendors for
goods or services received, it is categorized as an operating activity.
 Collection of accounts receivable: If a business collects money from its customers who
previously purchased goods on credit, it is considered an operating activity.
2. Investing activities: These activities involve the buying, selling, or acquiring of long-term
assets or investments. Examples of investing activities include:
 Purchase of property, plant, and equipment: When a business buys new machinery,
equipment, or land, the cash outflow is classified as an investing activity.
 Sale of investments: If a company sells its investments, such as stocks or bonds, the cash
inflow is considered an investing activity.
 Acquisition of another business: When a company acquires another business, the cash
outflow for the purchase is classified as an investing activity.
 Purchase or sale of long-term assets: If a business buys or sells assets like vehicles or
buildings, the cash flows associated with these transactions are considered investing
activities.
3. Financing activities: These activities involve obtaining funds from external sources or
repaying debts. Examples of financing activities include:
 Issuing shares or stock: When a company issues new shares to raise capital, the cash
inflow is classified as a financing activity.
 Borrowing money: When a business takes out a loan from a bank or issues bonds to raise
funds, the cash inflow is considered a financing activity.
 Repayment of loans: If a company repays its principal amount on loans or pays interest
on borrowed funds, the cash outflow is classified as a financing activity.
 Payment of dividends: When a company distributes profits to its shareholders in the form
of dividends, the cash outflow is categorized as a financing activity.
By categorizing cash flows into these three activities, businesses and investors can analyze and
understand how cash is generated and used within a company.
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At the beginning of the year, Ortiz Eyewear had total assets of £900,000 and total liabilities
of £440,000. Answer the following questions.
a. If total assets decreased £100,000 during the year and total liabilities increased £80,000 dur
ing the year, what is the amount of equity at the end of the year?
b. During the year, total liabilities decreased £100,000 and equity increased £200,000. What is
the
amount of total assets at the end of the year?
c. If total assets increased £50,000 during the year and equity increased £60,000 during the
year, what is the amount of total liabilities at the end of the year

ChatGPT
Poe
a. To find the amount of equity at the end of the year, we can calculate it using the formula:
Equity = Total Assets - Total Liabilities
Given that total assets decreased by £100,000 and total liabilities increased by £80,000, we can
calculate the equity at the end of the year as follows:
Equity = (£900,000 - £100,000) - (£440,000 + £80,000)
= £800,000 - £520,000
= £280,000
Therefore, the amount of equity at the end of the year is £280,000.
b. To find the amount of total assets at the end of the year, we can rearrange the equity formula:
Total Assets = Equity + Total Liabilities
Given that total liabilities decreased by £100,000 and equity increased by £200,000, we can
calculate the total assets at the end of the year as follows:
Total Assets = (£440,000 - £100,000) + (£200,000)
= £340,000 + £200,000
= £540,000
Therefore, the amount of total assets at the end of the year is £540,000.
c. To find the amount of total liabilities at the end of the year, we can rearrange the equity
formula:
Total Liabilities = Total Assets - Equity
Given that total assets increased by £50,000 and equity increased by £60,000, we can calculate
the total liabilities at the end of the year as follows:
Total Liabilities = (£900,000 + £50,000) - (£440,000 + £60,000)
= £950,000 - £500,000
= £450,000
Therefore, the amount of total liabilities at the end of the year is £450,000.