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Connect Financial Accounting Chapter 1

Q1. Determine the missing amount from each of the separate situations given below.

Q2. Answer the following questions. (Hint: Use the accounting equation.)At the beginning of the year, Addison Company’s assets are

a. $273,000 and its equity is $204,750. During the year, assets increase $80,000 and liabilities increase $46,000. What is the equity at year-end?

b. Office Store has assets equal to $247,000 and liabilities equal to $210,000 at year-end. What is the equity for Office Store at year-end?

c. At the beginning of the year, Quaker Company’s liabilities equal $71,000. During the year, assets increase by $60,000, and at year-end assets equal $190,000. Liabilities decrease $6,000 during the year. What are the beginning and ending amounts of equity?

Q3. On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $83,110 in assets in exchange for its common stock to launch the business. On October 31, the company’s records show the following items and amounts.

Cash	$	14,550		Cash dividends	$	1,120
Accounts receivable		11,500		Consulting revenue		11,500
Office supplies		2,400		Rent expense		2,640
Land		45,860		Salaries expense		5,920
Office equipment		17,020		Telephone expense		800
Accounts payable		7,820		Miscellaneous expenses		620
Common Stock		83,110

Using the above information prepare an October income statement for the business.

Q4. On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $82,780 in assets in exchange for its common stock to launch the business. On October 31, the company’s records show the following items and amounts.

Cash	$	15,760		Cash dividends	$	640
Accounts receivable		10,600		Consulting revenue		10,600
Office supplies		1,960		Rent expense		2,270
Land		46,030		Salaries expense		5,450
Office equipment		16,580		Telephone expense		760
Accounts payable		7,250		Miscellaneous expenses		580
Common Stock		82,780

Using the above information prepare an October statement of retained earnings for Ernst Consulting.

Q5. On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $83,660 in assets in exchange for its common stock to launch the business. On October 31, the company’s records show the following items and amounts.

Cash	$	12,040		Cash dividends	$	1,760
Accounts receivable		13,800		Consulting revenue		13,800
Office supplies		2,990		Rent expense		3,210
Land		45,940		Salaries expense		6,690
Office equipment		17,710		Telephone expense		870
Accounts payable		8,230		Miscellaneous expenses		680
Common Stock		83,660

Using the above information prepare an October 31 balance sheet for Ernst Consulting.

Q6. At the beginning of the year, Addison Company’s assets are $166,000 and its equity is $124,500. During the year, assets increase $80,000 and liabilities increase $54,000. What is the equity at year-end?

Q7. Office Store has assets equal to $211,000 and liabilities equal to $181,000 at year-end. What is the equity for Office Store at year-end?

Q8. At the beginning of the year, Quaker Company’s liabilities equal $52,000. During the year, assets increase by $60,000, and at year-end assets equal $190,000. Liabilities decrease $11,000 during the year. What are the beginning and ending amounts of equity?

Q9. On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $82,780 in assets in exchange for its common stock to launch the business. On October 31, the company’s records show the following items and amounts.

Cash	$15,760	Cash dividends	$640
Accounts receivable	10,600	Consulting revenue	10,600
Office supplies	1,960	Rent expense	2,270
Land	46,030	Salaries expense	5,450
Office equipment	16,580	Telephone expense	760
Accounts payable	7,250	Miscellaneous expenses	580
Common Stock	82,780

Using the above information prepare an October income statement for the business.

Q10. Using the above information prepare an October statement of retained earnings for Ernst Consulting.

Q11. Using the above information prepare an October 31 balance sheet for Ernst Consulting.

Q12. Also assume the following:

1. The owner’s initial investment consists of $36,750 cash and $46,030 in land in exchange for its common stock..
2. The company’s $16,580 equipment purchase is paid in cash.
3. The accounts payable balance of $7,250 consists of the $1,960 office supplies purchase and $5,290 in employee salaries yet to be paid.
4. The company’s rent, telephone, and miscellaneous expenses are paid in cash.
5. No cash has been collected on the $10,600 consulting fees earned.

Using the above information prepare an October 31 statement of cash flows for Ernst Consulting. (Cash outflows should be indicated by a minus sign.)