H1 part c

Financial Accounting: Basic Background

• TOPIC C – posted Thursday Let’s practice the Accounting Equation: A = L +OE
  1.             At the beginning of 2019, ABC Co.’s assets were $410,000 and its owner’s equity was $170,000.  During the year, assets increased by $40,000 and liabilities decreased by $15,000.  What is the owner’s equity at the end of 2019?
  2.             Jake began the year with $500,000 in assets and $300,000 in liabilities. Net Income for the year was $150,000 and dividends declared by the board of directors was $25,000. Assuming no change in Liabilities, what were total assets at yearend?
  3.            Doughnuts Coffee Shop has current assets of $280 million; property, plant, and equipment of $430 million; and other assets totaling $170 million. Current liabilities are $170 million and long-term liabilities total $300 million. Use these data to write Doughnuts’ accounting equation.
  4.             Diamond, Inc. began the year with total liabilities of $95,000 and total stockholders’ equity of $35,000. During the year, total assets increased by 5%. How much are total assets at the end of the year?
  5.             North West Airlines Ltd. began the year with total assets of $100,000 and total liabilities of $52,000. Net income for the year was $27,000, and dividends were zero. How much is stockholders’ equity at the end of the year
  6.            Hobo Doughnuts has current assets of $270 million; property, plant, and equipment of $400 million; and other assets totaling $160 million. Current liabilities are $160 million and long-term liabilities total $340 million.
• a) Use this data to write Hobo accounting equation.
• b) How much in resources does Hobo have to work with?
• c) How much does Hobo owe creditors?
• d) How much of the company’s assets do the Hobo stockholders actually own?
• 7. Prepare the balance sheet of Mary Burke Banking Company at August 31, 2019Total revenue31.4Investment assets.169.3Receivables  0.9Property and equipment1.6Current liabilities155.4Other expenses6.6Common stock14.2Retained earnings, beginning9.3Interest expense  0.1Retained earnings, ending   ? Salary expenses17.4Cash 2.8Long-term liabilities  2.6Other assets14.2