chapter1 chapter2 chapter3 chapter13

Exercise 1-7A
a. As of 31st December, Year 1, Moss company had
    Particulars
    Amount $
    total cash
    195000
    (+)Common stock
    84500
    Total Assets
    279500
    (-)Notes payable
    90500
    Retained Earnings as on December 31, Year 1
    189000

. The accounting equation will be
Total cash+ Common Stock= Notes Payable+ Retained Earnings
The beginning account balance will be recorded under:
Cu
ent Assets- Total cash & Common stock
Equity Capital- Retained Earnings
Cu
ent Liabilities- Notes Payable
c. The recording of revenue, expense and dividend events under the appropriate elements of the
Profit & Loss Account- Revenue, Expense
Balance Sheet- Dividend
d. The accounting equation as of 31 December, Year 2 will be:
    Particulars
    Amount $
    Cash Revenue
    42000
    (-) Cash Expense
    24000
    (-) Cash Dividends
    3000
    Cash Balance
    15000
e. The beginning and ending balance in the cash account are different due to the payment of dividend and expense. The beginning and ending balance in the in the common stock is same as there is no transaction related to stock in the cu
ent year.
Exercise 2-7A
a.
    Balance Sheet of Chung as on December 31, Year 1
    Particulars
    Amount $
    Assets
     
    Cu
ent Assets
     
     Cash
    3000
     Accrued Expenses
    5000
    Non Cu
ent Assets
     
    Liabilities
     
     Cu
ent Liabilities
     
     Non Cu
ent Liabilities
     
    Total
    8000
. The amount of net income that Chung would report on the Year 1 Income Statement are as follows:
    Particulars
    Amount $
     Cash Revenue
    8000
    (-) Accrued Expense
    5000
    Net cash balance
    3000
c. The cash flow statement of Chung for the Year 1 are as follows:
    Particulars
    Amount $
    Cash and Cash Equivalents on the Year 1
     
    Operating Activities
     
    Cash income
    8000
    (+) Change in operating Assets and Liabilities
     
     Accrued Expenses
    5000
    Cash balance
    13000
d. The answers of b and c are different as in question b they had asked about the net balance of cash and in question c they consider the change in operating assets and liabilities.
Exercise 2-9A
a.
    Event
    Balance Sheet
    Income Statement
    Statement of cash Flow
    
    Cash
    Accounts Receivables
    Accounts Payable
    Salary Payable
    Retained Earnings
    Revenue
    Expense
    Net Income
    
    1
     
    70000
     
     
    70000
    70000
     
    70000
    NA
    2
    40000
     
     
     
    40000
    4000
     
    4000
    OA
    3
    -36000
     
    36000
     
     
     
    36000
    -36000
    OA
    4
    -10000
     
     
    10000
     
     
    10000
    -10000
    OA
    5
     
    47000
     
     
    47000
    47000
     
    47000
    OA
    6
    -16000
     
    16000
     
     
     
    16000
    -16000
    OA
    7
    -8000
     
     
     
    8000
     
    8000
    -8000
    FA
    8
     
    2000
     
     
    2000
     
    2000
    -2000
    OA
    Total
    -30000
    119000
    52000
    10000
    167000
    121000
    72000
    49000
    0
. The amount of total assets is $89000
c. The balance of account Receivables is $119000
d. The balance of account Payables is $52000
e....