ACC – Week 1 – Homework Questions and Answers

ACC Week 1 Homework Questions and Answers
7 pages of homework screenshots
Examples:
Question 1
At the beginning of the year, Hernandez Company had total assets of $800,000 and total liabilities of $500,000. Answer
the following questions.

(a) If total assets increased $150,000 during the year and total liabilities decreased $80,000, what is the amount of
owner’s equity at the end of the year?

(b) During the year, total liabilities increased $100,000 and owner’s equity decreased $70,000 What is the amount of
total assets at the end of the year?

(c) If total assets decreased $80,000 and owner’s equity increased $120,000 during the year, what is the amount of
total liabilities at the end of the year?

Question 2
Presented below are three business transactions. For each transaction indicate whether there is an Increase, a Decrease or No Effect on the assets, the liabilities and the owner’s equity.
(a) Invested cash in the business
(b) Withdrawal of cash by owner
(c) Received cash from a customer who had previously been billed for services provided.

Question 3
Classify each of the following items as owner’s drawing, revenue, or expense.
(a) Advertising
(b) Commission
(c) Insurance
(d) Salaries
(e) Bergman
(f) Rent revenue
(g) Utilities expense

Question 4
Brandon Computer Timeshare Company entered into the following transactions during May 2010.
Instructions
Indicate with the appropriate letter whether each of the transactions below result in:

(a) an increase in assets and a decrease in assets.
(b) an increase in assets and an increase in owner’s equity.
(c) an increase in assets and an increase in liabilities.
(d) a decrease in assets and a decrease in owner’s equity.
(e) a decrease in assets and a decrease in liabilities.
(f) an increase in liabilities and a decrease in owner’s equity.
(g) an increase in owner’s equity and a decrease in liabilities.

1. Purchased computer terminals for $20,000 from Digital Equipment on account.
2. Paid $4,000 cash for May rent on storage space.
3. Received $15,000 cash from customers for contracts billed in April.
4. Provided computer services to Fisher Construction Company for $3,000 cash.
5. Paid Northern States Power Co. $11,000 cash for energy usage in May.
6. Brandon invested an additional $32,000 in the business.
7. Paid Digital Equipment for the terminals purchased in (1) above.
8. Incurred advertising expense for May of $1,200 on account.

Question 5
Lily Company had the following assets and liabilities on the dates indicated.
December 31 Total Assets Total Liabilities
2009 $400,000 $250,000
2010 $460,000 $300,000
2011 $590,000 $400,000
Lily began business on January 1, 2009, with an investment of $100,000.
Instructions
From an analysis of the change in owner’s equity during the year, compute the net income (or loss) for the following
situations. (If a net loss, record amount using either a negative sign preceding the number eg -45 or
parentheses eg (45).)
(a) 2009, assuming Lily’s drawings were $15,000 for the year.
(b) 2010, assuming Lily made an additional investment of 50,000 and had no drawings in 2010.
(c) 2011, assuming Lily made an additional investment of $15,000 and had drawings of $30,000 in 2011.

Question 6
Jan Nab is the sole owner of Deer Park, a public camping ground near the Lake Mead National Recreation Area. Jan has
compiled the following financial information as of December 31, 2010.
Revenues during 2010—camping fees $140,000 Market value of equipment $140,000
Revenues during 2010—general store 50,000 Notes payable 60,000
Accounts payable 11,000 Expenses during 2010 150,000
Cash on hand 23,000 Supplies on hand 2,500
Original cost of equipment 105,500
Jan Nab began business on January 1, 2010, with an investment of $20,000.
Instructions
(a) Determine Jan Nab’s net income from Deer Park for 2010.

(b) Complete the balance sheet for Deer Park as of December 31, 2010. (List assets in order of liquidity and
liabilities from largest to smallest eg 10, 5, 3, 2.)
Deer PARK
Balance Sheet

Question 7
Maria Gonzalez opened a veterinary business in Nashville, Tennessee, on August 1. On August 31, the balance sheet showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Office Equipment $6,000, Accounts Payable $3,600, and M. Gonzalez, Capital $13,700.
During September the following transactions occurred.
Paid $2,900 ca 1. sh on accounts payable.
2. Collected $1,300 of accounts receivable.
3. Purchased additional office equipment for $2,100, paying $800 in cash and the balance on account.
4. Earned revenue of $8,000 of which $2,500 is collected in cash and the balance is due in October.
5. Withdrew $1,000 in cash for personal use.
6. Paid salaries $1,700, rent for September $900, and advertising expenses $300.
7. Incurred utility expenses for month on account $170.
8. Received $10,000 from Capital Money Bank – money borrowed on a note payable.
Instructions
(a) Complete the table below. (If amount is a decrease, use either a negative sign preceding the number eg -45 or parentheses eg (45). For item 6. list amounts from largest to smallest eg 10, 5, 3, 2. If answer is zero, please enter 0. All blanks must be
filled in. Note: Drawings and Expenses always decrease the account.)
MARIA GONZALEZ, VETERINARIAN

(b) Complete the income statement for September, an owner’s equity statement for September, and a balance sheet at September 30. (List amounts from largest to smallest eg 10, 5, 3, 2. If a net loss, record amount using either a negative sign preceding the
number eg -45 or parentheses eg (45). For the balance sheet, list assets in order of liquidity and liabilities from largest to smallest eg 10, 5, 3, 2.)
Maria Gonzalez, Veterinarian

Maria Gonzalez, Veterinarian
Owner’s Equity Statement

Maria Gonzalez, Veterinarian
Balance Sheet

Liabilities and Owner’s Equity


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