100 ending balance -$ 71 B u s i n e s s F i n a n c e

Check Please

2.
Basic computations. The following selected balances were extracted from
the accounting records of Rossi Enterprises on December 31, 20X3:

Accounts
Payable   $ 3,200  Interest Expense $2,500

Accounts
Receivable   14,800  Land   18,000

Auto
Expense  1,900  Loan Payable  44,200

Building
  32,200  Tax Expense  3,300

Cash  7,400  Utilities Expense 4,100

Fee
Revenue   60,100  Wage Expense   37,500

a.
Determine Rossi’s total assets as of December 31.$72,400

b.
Determine the company’s total liabilities as of December 31.  $47,400

c.
Compute 20X3 net income or loss.  $10,800

  Revenue: 60,100

  -Expenses: 49,300 = $10,800

5.
Accounting equation; analysis of owner’s equity. Sports car Repair
revealed the following financial data on January 1 and December 31 of the
current year.

  Assets  Liabilities

January
1  $46,500  $20,000

December
31  49,000  31,000

a.Compute the change in
owner’s equity during the year by using the accounting equation. Assets = Liabilities + Equity

January 1
  $46,500 = $20,000 + $26,500

December
31 $49,000 = $31,000 + $18,000

= $8,500
Decrease

b. 
Assume
that there were no owner investments or withdrawals during the year. What is
the probable cause of the change in owner’s equity from part (a)? Net Loss

c.Assume that there were no
owner investments during the year. If the owner withdrew $17,000, determine and
compute the company’s net income or net loss. Be sure to label your answer.

Beginning
Balance 26,500

Withdrawals
-17,000

Balance =
9,500

Ending
Balance= 18,000

Net
income = $ 8,500

d. 
If
owner investments and withdrawals amounted to $13,000 and $2,000, respectively,
determine whether the company operated profitably during the year. Show
appropriate calculations.

Beginning
Balance 26,500  Net loss =
$19,500

Withdrawals
   -2,000

Investments  + 13,000

Balance =  37,500

End
Balance  18,000

8.
Financial statement relationships. The following information appeared on
the financial statements of the Altoona Repair Company:

Income
statement  

Total
expenses  $
65,900

Net
income       7,200

Statement
of owner’s equity 

Beginning
owner’s equity balance  $ 113,200

Owner
withdrawals    61,300

Ending
owner’s equity balance    71,150

Balance
sheet

Total
Liabilities    $ 97,375

By
picturing the content of and the interrelationships among the financial
statements, determine the following:

a. 
Total
revenues for the year-

Expenses ($65,900) + Net
income (7,200) = Revenue ($73,100)

b. 
Total
owner investments

Beginning Balance   $113,200

Withdrawals   
$ – 61,300

   
=  $51,900

Net Income    + 7,200

   
=  $59,100

Ending Balance   -$71,150

Investments   $12,050

 

c. 
Total
assets

Assets = Liabilities +
Equity

Liabilities ($97,375) +
Equity ($71,150) = $168,525

Total Assets = $168,525