Question

Q1. Compute the missing amount for each of the following separate companies a through d. (Losses...

Q1. Compute the missing amount for each of the following separate companies a through d. (Losses and amounts to be deducted should be indicated with a minus sign.)

(a) (b) (c) (d)
Equity, December 31, 2014 $0 $0 $0 $0
Owner investments during the year 96,500 88,368 206,183
Owner withdrawals during the year (50,000) (11,000) (56,000)
Net income (loss) for the year 92,500 45,545 (3,000)
Equity, December 31, 2015 $98,500 $95,545 $106,183

Q2.

A sole proprietorship had the following assets and liabilities at the beginning and end of this year.

  

    Assets   Liabilities
  Beginning of the year $ 101,000 $ 43,299    
  End of the year 150,000 60,750    

    

a. Owner made no investments in the business and no withdrawals were made during the year.
b. Owner made no investments in the business but withdrew $1,050 cash per month for personal use.
c. Owner made no withdrawals during the year but did invest an additional $45,000 cash.
d. Owner withdrew $1,050 cash per month for personal use and invested an additional $25,000 cash

Determine the net income earned or net loss incurred by the business during the year for each of the above separate cases: (Decreases in equity should be indicated with a minus sign.)

a. b. c. d.
Beginning of the year—Equity
Owner investments
Withdrawals by owner
Net income (loss)
End of the year—Equity

Homework Answers

Answer #1

Q1.

a. b. c. d.
Equity, December 31, 2014 $ 0 $ 0 $ 0 $ 0
Owner investments during the year 96,500 100,000 88,368 206,183
Owner withdrawals during the year - 90,500 - 50,000 - 11,000 - 56,000
Net income ( loss) for the year 92,500 45,545 -3,000 - 44,000
Equity, December 31, 2015 $ 98,500 $ 95,545 $ 74,368 $ 106,183

Q2.

a. b. c. d.
Beginning of the year : Equity $ 57,701 $ 57,701 $ 57,701 $ 57,701
Owner investments 0 0 45,000 25,000
Withdrawal by owner 0 - 12,600 0 - 12,600
Net income ( loss) 31,549 44,149 - 13,451 19,149
End of the year : Equity $ 89,250 $ 89,250 $ 89,250 $ 89,250
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