Accounting

Accounting Assignment

Answer 1: Basic Accounting Equations

Asset (A)

Expense (E)

Liabilities (L)

Asset (A)

Revenue (R)

Asset (A)

Asset (A)

Expense (E)

Answer 2: Basic balances Sheet computations

a. Determine Rossi's total assets as of December 31

Rossi Enterprises

December 31st

Cash 7,400

Accounts Receivable 14,800

Current Assets

22,200

Building

30,000

Land 18,000

Fixed Assets

48,000

Total Assets

70,200

b. Determine the company's total liabilities as of December 31

Rossi Enterprises

December 31st

Accounts Payable

3,200

Loan Payable 40,000

Total liabilities

43,200

c. Compute 20X3 net income or loss

Rossi Enterprises

December 31st

Net Income

Fee Revenue

56,900

Operating Expenses

Auto Expense

1,900

Utilities Expense 4,100

Wage Expense 37,500

Total Operating Expenses

43,500

EBIT

13,400

Interest Expense

2,500

EBT

10,900

Taxes

3,300

Net Income

7,600

Answer 3: Balance sheet preparation

Preston Company

Balance Sheet Statement

December 31, 19XX

Assets

Liabilities and owner's equity

Current Assets

Current Liabilities

Cash

17000

Accounts payable

11000

Accounts receivable

24000

Loan payable

30000

Total Current Assets

41000

Total Current Assets

41000

Fixed Assets

Owner's Equity

Building

44000

J. Preston, Owners Equity

65000

Land

21000

Total Current Assets

65000

Total Assets

106000

Total Liab and Owner's equity

106000

Answer 4: Basic transaction processing

a. Accounting Equation:

Accounting Equation is as followed (Albrecht, Stice , Stice , Swain, 2012):

Assets = Liabilities + Owner's Equity

Cash + Accounts Receivable + Office Furniture + Van = Investments/Withdrawals + Revenues/Expenses

b. Recording of each transaction on Accounting Equation

Assets = Liabilities + Owner's Equity

19000-9000+1800+2100-300+800-600+250 = 19000-9000+1800+2100+300-800+1500-600-250

14050 = 14050

Working

1

Cash

19000

Investment

19000

2

Van expense

9000

Cash

9000

3

Office furniture

1800

A/P

1800

4

Account Receivable

2100

Consulting services Revenue

2100

5

Repair expenses

300

Cash

300

6

Cash

800

Account Receivable - Consulting services Revenue

800

7

Office furniture

500

Account Payable

500

8

Utilities Expense

150

Accounts Payable

150

9

Parker's Drawings

600

Cash

600

10

Cash

250

Account Receivable - Consulting services Revenue

250

c. Answer the following questions for Parker

(1) How much does the company owe to its creditors at month-end? On which financial statement(s) would this information be found?

Company owes 1300 to its creditors at month-end. This information will be available on Balance Sheet of the company in the section of Current liabilities as account Payables.

(2) Did the company have a “good” month from an accounting viewpoint? Briefly explain.

Yes, company has a “good” month from an accounting viewpoint due to ...