(10-15 min.) E 1-3

  1. Increased assets (cash)
  2. No effect on total assets. Increase in land offset the decrease in cash.
  3. Decreased assets (cash)
  4. Increased assets (machinery and equipment)
  5. Increased assets (accounts receivable)
  6. Decreased assets (cash)
  7. No effect on total assets. Increase in cash offset the decrease in accounts receivable.
  8. No effect (a personal transaction)
  9. No effect on total assets. Increase in cash offset the decrease in land.
  10. Increased assets (cash)

(5-10 min.) E 1-4

Assets = Liabilities + Owner’s Equity

Company A $96,200 $61,800 $34,400

Company B 65,900 31,900 34,000

Company C 81,700 79,800 1,900

 

 

 

(10-15 min.) E 1-5

Amounts in Millions

Total Total Total

Assets ! Liabilities = Owners’ equity

Beginning. . . $5,819 ! $2,861 = $2,958

 

Req. 1

Increase during the year. . . 737

_________________________________________

Ending. . . $7,260 ! $3,565 = $3,695

 

Req. 2

Possible reasons for the increase in owners’ equity:

  1. Net income.
  2. Investors made additional investments in the company.

(10-20 min.) E 1-6

 

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