,Solution manual for Using Financial Accounting ,
1st Edition Carl Warren
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel
sheet if it exists.
4- We have all what you need, we make
update at every time. There are many new
editions waiting you.
5- If you think you purchased the wrong file
You can contact us at every time, we can
replace it with true one.
Our email:
, CHAPTER 1
THE ROLE OF ACCOUNTING IN BUSINESS
CLASS DISCUSSION QUESTIONS
1. The objective of most businesses is to max- the ability to offer low prices. Thus, your
imize profits. Profit is the difference between friend should attempt to compete using a pre-
the amounts received from customers for mium-price emphasis. For example, your
goods or services provided and the amounts friend could offer personalized service to cus-
paid for the inputs used to provide those tomers such as knowing customers’ names
goods or services. and providing a friendly atmosphere, home
2. A manufacturing business changes basic delivery of medicines, help in filing insurance
inputs into products that are sold to custom- forms, and 24-hour call service.
ers. In contrast, a merchandising business 7. eBay services its customers by maintaining a
purchases products in a form that can be sold Web-based community in which buyers and
to customers without any additional changes. sellers are brought together in an efficient for-
Examples of manufacturing businesses mat to browse, buy, and sell items such as
include Alcoa, Boeing, Caterpillar, and Dow collectibles, automobiles, high-end or pre-
Chemical. Examples of merchandising busi- mium art pieces, jewelry, consumer electron-
nesses include Best Buy, Macy’s, Target, ics, and a host of practical and miscellaneous
and Walmart. items.
3. A manufacturing business changes basic in- 8. No. The stakeholders within a group do not
puts into products that are sold to customers. always share the same interests. For exam-
A service business provides services rather ple, bankers are primarily concerned about
than products to customers. A restaurant, the ability of the business to repay its debt,
such as McDonald’s, has characteristics of including interest. In contrast, stockholders
both a manufacturing and a service business are more concerned about the long-term
in that McDonald’s takes raw inputs, such as profitability of the business, the business’s
cheese, fish, and beef, and processes them ability to pay dividends, and the future appre-
into products for consumption by its custom- ciation of their stock.
ers. At the same time, McDonald’s provides
services of waiting on its customers. 9. Examples of financing activities for South-
west Airlines could include issuing stock, bor-
4. The corporate form allows the company to rowing from banks, and paying dividends. Ex-
obtain large amounts of resources by issuing amples of investing activities could include
stock. In addition, in a corporation, the stock- purchasing new aircraft, acquiring new termi-
holders’ liability to creditors for the debts of nal facilities, and upgrading its computerized
the company is limited to their investment in reservation systems. Examples of operating
the corporation. For these reasons, most activities could include transporting passen-
large companies that require large invest- gers and freight.
ments in property, plant, and equipment are
10. The role of accounting is to provide infor-
organized as corporations.
mation for managers to use in operating the
5. The business emphasis of KIA is a low-cost business. In addition, accounting provides in-
emphasis. In contrast, the business empha- formation to other stakeholders to use in as-
sis of BMW is a premium-price emphasis. sessing the economic performance and con-
The difference in emphases is directly dition of the business.
reflected in the prices of the autos. For
example, a new KIA starts for just over 11. The income statement presents a summary
$15,000, but a new BMW starts for just over of the revenues and expenses of a business
$30,000. for a specific period of time. The statement of
6. Super Walmart will compete for customers stockholders’ equity indicates the changes in
using a low-cost strategy. The size and buy- retained earnings that have occurred over a
ing power of Walmart Inc. provides Walmart specific period of time. The balance sheet pre-
a competitive advantage over your friend in sents a listing of the assets, liabilities, and
1
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, stockholders’ equity of a business as of a period will appear on the balance sheet and
specific date. The statement of cash flows pre- the statement of cash flows.
sents a summary of the cash receipts and cash 14. No. The business entity concept limits the re-
payments of a business entity for a specific pe- cording of economic data to transactions di-
riod of time. rectly affecting the activities of the business.
12. Net loss of $(1,636) million ($72,618 million – The payment of the interest of $6,000 is a per-
$74,254 million). sonal transaction of Billy Jessop and should
not be recorded by Valley Delivery Service.
13. Net income or net loss will appear on the in- 15. The land should be recorded at its cost of
come statement and the statement of stock- $110,000 to Wok Repair Service. This is con-
holders’ equity. The Retained Earnings and sistent with the cost concept.
Common Stock balances at the end of the pe- 16. No. The offer of $975,000 and the increase in
riod will appear on the statement of stock- the assessed value should not be recognized
holders’ equity and the balance sheet. in the accounting records. This is consistent
Finally, the Cash balance at the end of the with the cost concept.
2
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, EXERCISES
E1–1
1. service 6. merchandising 11. manufacturing
2. merchandising 7. manufacturing 12. service
3. manufacturing 8. manufacturing 13. service
4. manufacturing 9. service 14. service
5. service 10. manufacturing 15. merchandising
E1–2
1. a—low-cost 5. a—low-cost 10. a—low-cost
2. a—low-cost 6. b—premium-price 11. b—premium-price
3. b—premium- 7. a—low-cost 12. b—premium-price
price 8. b—premium-price
4. a—low-cost 9. b—premium-price
E1–3
Best Buy stockholders’ equity (in millions): $15,591 – $12,112 = $3,479
Gamestop stockholders’ equity (in millions): $2,820 – $2,208 = $612
E1–4
Apple stockholders’ equity (in millions): $338,516 – $248,028 = $90,488
Microsoft stockholders’ equity (in millions): $286,556 – $184,226 = $102,330
E1–5
a. $262,500 + $450,000 = $712,500
b. $1,320,000 – $787,500 = $532,500
c. $3,150,000 – $900,000 = $2,250,000
3
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, E1–6
a. Costco stockholders’ equity (in millions): $45,400 – $29,816 = $15,584
b. Target liabilities (in millions): $42,779 – $11,833 = $30,946
c. Walmart assets (in millions): $161,826 + $74,669 = $236,495
E1–7
It would be incorrect to say the business had incurred a net loss of $10,000. The
excess of the dividends over the net income for the period is a decrease in the
amount of retained earnings in the business.
E1–8
Company Chang
Stockholders’ equity at end of year ($900,000 – $300,000) .................... $600,000
Deduct stockholders’ equity at beginning of year
($775,000 – $400,000) ............................................................................. (375,000)
Net income (increase in stockholders’ equity) .................................... $225,000
Company Henry
Increase in stockholders’ equity (as determined for Chang) ................. $ 225,000
Add dividends ............................................................................................ 90,000
Net income ............................................................................................ $315,000
Company Nagel
Increase in stockholders’ equity (as determined for Chang) ................. $ 225,000
Deduct additional issuance of common stock ........................................ (125,000)
Net income ............................................................................................ $ 100,000
Company Wilcox
Increase in stockholders’ equity (as determined for Chang) ................. $ 225,000
Deduct additional issuance of common stock ........................................ (125,000)
Add dividends ............................................................................................ 90,000
Net income ............................................................................................ $ 190,000
4
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, E1–9
a. (1) Year 2 total liabilities (in millions): $7,311 – $2,173 = $5,138
(2) Year 1 total stockholders’ equity (in millions): $6,166 – $4,040 = $2,126
b. Year 2 net income (in millions): $10,647 – $8,183 – $2,101 – $217 – $47 = $99
E1–10
Balance sheet items: 1, 2, 3, 7, 8
E1–11
Income statement items: 4, 5, 6, 9, 10
E1–12
1. a—asset 6. a—asset
2. b—liability 7. b—liability
3. a—asset 8. d—expense
4. e—dividend 9. d—expense
5. c—revenue 10. d—expense
5
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, E1–13
ALL SEASONS COMPANY
Statement of Stockholders’ Equity
For the Month Ended June 30, 20Y7
Common Stock Retained Earnings Total
Balances, June 1, 20Y7 .................. $30,000 $145,000 $175,000
Issued common stock .................... 20,000 20,000
Net income ...................................... 87,500 87,500
Dividends ........................................ (15,000) (15,000)
Balances, June 30, 20Y7 ................ $50,000 $217,500 $267,500
E1–14
JLM SERVICES
Income Statement
For the Month Ended August 31, 20Y5
Fees earned........................................................................... $2,550,000
Operating expenses:
Wages expense ............................................................... $1,612,500
Rent expense ................................................................... 240,000
Supplies expense ............................................................ 22,500
Miscellaneous expense .................................................. 41,250
Total operating expenses .......................................... (1,916,250)
Net income ............................................................................ $ 633,750
6
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, E1–15
In each case, solve for a single unknown, using the following equation:
Stockholders’ Equity (beginning) + Additional Issue of Common Stock – Dividends
+ Revenue – Expenses = Stockholders’ Equity (ending)
AL Stockholders’ equity at end of year ($800,000 – $450,000)......... $ 350,000
Deduct stockholders’ equity at beginning of year
($400,000 – $200,000) ........................................................................ (200,000)
Increase in stockholders’ equity ................................................... $ 150,000
Deduct increase due to net income ($175,000 – $65,000) ........... (110,000)
Add dividends ................................................................................ 50,000
Additional issue of common stock ......................................... (a) $ 90,000
CO Stockholders’ equity at end of year ($460,000 – $110,000)......... $ 350,000
Deduct stockholders’ equity at beginning of year
($300,000 – $130,000). ................................................................... (170,000)
Increase in stockholders’ equity ................................................... $ 180,000
Add dividends ................................................................................ 20,000
Deduct additional issue of common stock .................................. (50,000)
Increase due to net income ........................................................... $ 150,000
Add expenses ................................................................................. 70,000
Revenue ..................................................................................... (b) $ 220,000
KS Stockholders’ equity at end of year ($660,000 – $360,000)......... $ 300,000
Deduct stockholders’ equity at beginning of year
($550,000 – $325,000) .................................................................... (225,000)
Increase in stockholders’ equity ................................................... $ 75,000
Add decrease due to net loss ($115,000 – $130,000) .................. 15,000
Deduct additional issue of common stock ................................... (100,000)
Dividends................................................................................... (c) $ (10,000)
MT Stockholders’ equity at end of year ($1,200,000 – $700,000)...... $ 500,000
Add decrease due to net loss ($420,000 – $480,000) .................. 60,000
Add dividends ................................................................................ 90,000
Deduct additional issue of common stock .................................. (100,000)
Stockholders’ equity at beginning of year ................................... $ 550,000
Add liabilities at beginning of year ............................................... 350,000
Assets at beginning of year ..................................................... (d) $ 900,000
7
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, E1–16
a. MONTANA INTERIORS
Balance Sheet
October 31, 20Y8
Assets
Cash ................................................................................. $110,000
Accounts receivable ....................................................... 75,000
Supplies ........................................................................... 15,000
Total assets ..................................................................... $200,000
Liabilities
Accounts payable............................................................ $ 40,000
Stockholders’ Equity
Common stock ................................................................ $ 60,000
Retained earnings ........................................................... 100,000* 160,000
Total liabilities and stockholders’ equity ...................... $200,000
*$100,000 = $110,000 + $75,000 + $15,000 – $40,000 – $60,000
MONTANA INTERIORS
Balance Sheet
November 30, 20Y8
Assets
Cash ................................................................................. $ 140,000
Accounts receivable ....................................................... 118,000
Supplies ........................................................................... 20,000
Total assets ..................................................................... $ 278,000
Liabilities
Accounts payable............................................................ $ 65,000
Stockholders’ Equity
Common stock ................................................................ $ 60,000
Retained earnings ........................................................... 153,000** 213,000
Total liabilities and stockholders’ equity ...................... $ 278,000
**$153,000 = $140,000 + $118,000 + $20,000 – $65,000 – $60,000
8
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1st Edition Carl Warren
Notes
1- The file is chapter after chapter.
2- We have shown you few pages sample.
3- The file contains all Appendix and Excel
sheet if it exists.
4- We have all what you need, we make
update at every time. There are many new
editions waiting you.
5- If you think you purchased the wrong file
You can contact us at every time, we can
replace it with true one.
Our email:
, CHAPTER 1
THE ROLE OF ACCOUNTING IN BUSINESS
CLASS DISCUSSION QUESTIONS
1. The objective of most businesses is to max- the ability to offer low prices. Thus, your
imize profits. Profit is the difference between friend should attempt to compete using a pre-
the amounts received from customers for mium-price emphasis. For example, your
goods or services provided and the amounts friend could offer personalized service to cus-
paid for the inputs used to provide those tomers such as knowing customers’ names
goods or services. and providing a friendly atmosphere, home
2. A manufacturing business changes basic delivery of medicines, help in filing insurance
inputs into products that are sold to custom- forms, and 24-hour call service.
ers. In contrast, a merchandising business 7. eBay services its customers by maintaining a
purchases products in a form that can be sold Web-based community in which buyers and
to customers without any additional changes. sellers are brought together in an efficient for-
Examples of manufacturing businesses mat to browse, buy, and sell items such as
include Alcoa, Boeing, Caterpillar, and Dow collectibles, automobiles, high-end or pre-
Chemical. Examples of merchandising busi- mium art pieces, jewelry, consumer electron-
nesses include Best Buy, Macy’s, Target, ics, and a host of practical and miscellaneous
and Walmart. items.
3. A manufacturing business changes basic in- 8. No. The stakeholders within a group do not
puts into products that are sold to customers. always share the same interests. For exam-
A service business provides services rather ple, bankers are primarily concerned about
than products to customers. A restaurant, the ability of the business to repay its debt,
such as McDonald’s, has characteristics of including interest. In contrast, stockholders
both a manufacturing and a service business are more concerned about the long-term
in that McDonald’s takes raw inputs, such as profitability of the business, the business’s
cheese, fish, and beef, and processes them ability to pay dividends, and the future appre-
into products for consumption by its custom- ciation of their stock.
ers. At the same time, McDonald’s provides
services of waiting on its customers. 9. Examples of financing activities for South-
west Airlines could include issuing stock, bor-
4. The corporate form allows the company to rowing from banks, and paying dividends. Ex-
obtain large amounts of resources by issuing amples of investing activities could include
stock. In addition, in a corporation, the stock- purchasing new aircraft, acquiring new termi-
holders’ liability to creditors for the debts of nal facilities, and upgrading its computerized
the company is limited to their investment in reservation systems. Examples of operating
the corporation. For these reasons, most activities could include transporting passen-
large companies that require large invest- gers and freight.
ments in property, plant, and equipment are
10. The role of accounting is to provide infor-
organized as corporations.
mation for managers to use in operating the
5. The business emphasis of KIA is a low-cost business. In addition, accounting provides in-
emphasis. In contrast, the business empha- formation to other stakeholders to use in as-
sis of BMW is a premium-price emphasis. sessing the economic performance and con-
The difference in emphases is directly dition of the business.
reflected in the prices of the autos. For
example, a new KIA starts for just over 11. The income statement presents a summary
$15,000, but a new BMW starts for just over of the revenues and expenses of a business
$30,000. for a specific period of time. The statement of
6. Super Walmart will compete for customers stockholders’ equity indicates the changes in
using a low-cost strategy. The size and buy- retained earnings that have occurred over a
ing power of Walmart Inc. provides Walmart specific period of time. The balance sheet pre-
a competitive advantage over your friend in sents a listing of the assets, liabilities, and
1
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, stockholders’ equity of a business as of a period will appear on the balance sheet and
specific date. The statement of cash flows pre- the statement of cash flows.
sents a summary of the cash receipts and cash 14. No. The business entity concept limits the re-
payments of a business entity for a specific pe- cording of economic data to transactions di-
riod of time. rectly affecting the activities of the business.
12. Net loss of $(1,636) million ($72,618 million – The payment of the interest of $6,000 is a per-
$74,254 million). sonal transaction of Billy Jessop and should
not be recorded by Valley Delivery Service.
13. Net income or net loss will appear on the in- 15. The land should be recorded at its cost of
come statement and the statement of stock- $110,000 to Wok Repair Service. This is con-
holders’ equity. The Retained Earnings and sistent with the cost concept.
Common Stock balances at the end of the pe- 16. No. The offer of $975,000 and the increase in
riod will appear on the statement of stock- the assessed value should not be recognized
holders’ equity and the balance sheet. in the accounting records. This is consistent
Finally, the Cash balance at the end of the with the cost concept.
2
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, EXERCISES
E1–1
1. service 6. merchandising 11. manufacturing
2. merchandising 7. manufacturing 12. service
3. manufacturing 8. manufacturing 13. service
4. manufacturing 9. service 14. service
5. service 10. manufacturing 15. merchandising
E1–2
1. a—low-cost 5. a—low-cost 10. a—low-cost
2. a—low-cost 6. b—premium-price 11. b—premium-price
3. b—premium- 7. a—low-cost 12. b—premium-price
price 8. b—premium-price
4. a—low-cost 9. b—premium-price
E1–3
Best Buy stockholders’ equity (in millions): $15,591 – $12,112 = $3,479
Gamestop stockholders’ equity (in millions): $2,820 – $2,208 = $612
E1–4
Apple stockholders’ equity (in millions): $338,516 – $248,028 = $90,488
Microsoft stockholders’ equity (in millions): $286,556 – $184,226 = $102,330
E1–5
a. $262,500 + $450,000 = $712,500
b. $1,320,000 – $787,500 = $532,500
c. $3,150,000 – $900,000 = $2,250,000
3
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, E1–6
a. Costco stockholders’ equity (in millions): $45,400 – $29,816 = $15,584
b. Target liabilities (in millions): $42,779 – $11,833 = $30,946
c. Walmart assets (in millions): $161,826 + $74,669 = $236,495
E1–7
It would be incorrect to say the business had incurred a net loss of $10,000. The
excess of the dividends over the net income for the period is a decrease in the
amount of retained earnings in the business.
E1–8
Company Chang
Stockholders’ equity at end of year ($900,000 – $300,000) .................... $600,000
Deduct stockholders’ equity at beginning of year
($775,000 – $400,000) ............................................................................. (375,000)
Net income (increase in stockholders’ equity) .................................... $225,000
Company Henry
Increase in stockholders’ equity (as determined for Chang) ................. $ 225,000
Add dividends ............................................................................................ 90,000
Net income ............................................................................................ $315,000
Company Nagel
Increase in stockholders’ equity (as determined for Chang) ................. $ 225,000
Deduct additional issuance of common stock ........................................ (125,000)
Net income ............................................................................................ $ 100,000
Company Wilcox
Increase in stockholders’ equity (as determined for Chang) ................. $ 225,000
Deduct additional issuance of common stock ........................................ (125,000)
Add dividends ............................................................................................ 90,000
Net income ............................................................................................ $ 190,000
4
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, E1–9
a. (1) Year 2 total liabilities (in millions): $7,311 – $2,173 = $5,138
(2) Year 1 total stockholders’ equity (in millions): $6,166 – $4,040 = $2,126
b. Year 2 net income (in millions): $10,647 – $8,183 – $2,101 – $217 – $47 = $99
E1–10
Balance sheet items: 1, 2, 3, 7, 8
E1–11
Income statement items: 4, 5, 6, 9, 10
E1–12
1. a—asset 6. a—asset
2. b—liability 7. b—liability
3. a—asset 8. d—expense
4. e—dividend 9. d—expense
5. c—revenue 10. d—expense
5
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, E1–13
ALL SEASONS COMPANY
Statement of Stockholders’ Equity
For the Month Ended June 30, 20Y7
Common Stock Retained Earnings Total
Balances, June 1, 20Y7 .................. $30,000 $145,000 $175,000
Issued common stock .................... 20,000 20,000
Net income ...................................... 87,500 87,500
Dividends ........................................ (15,000) (15,000)
Balances, June 30, 20Y7 ................ $50,000 $217,500 $267,500
E1–14
JLM SERVICES
Income Statement
For the Month Ended August 31, 20Y5
Fees earned........................................................................... $2,550,000
Operating expenses:
Wages expense ............................................................... $1,612,500
Rent expense ................................................................... 240,000
Supplies expense ............................................................ 22,500
Miscellaneous expense .................................................. 41,250
Total operating expenses .......................................... (1,916,250)
Net income ............................................................................ $ 633,750
6
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, E1–15
In each case, solve for a single unknown, using the following equation:
Stockholders’ Equity (beginning) + Additional Issue of Common Stock – Dividends
+ Revenue – Expenses = Stockholders’ Equity (ending)
AL Stockholders’ equity at end of year ($800,000 – $450,000)......... $ 350,000
Deduct stockholders’ equity at beginning of year
($400,000 – $200,000) ........................................................................ (200,000)
Increase in stockholders’ equity ................................................... $ 150,000
Deduct increase due to net income ($175,000 – $65,000) ........... (110,000)
Add dividends ................................................................................ 50,000
Additional issue of common stock ......................................... (a) $ 90,000
CO Stockholders’ equity at end of year ($460,000 – $110,000)......... $ 350,000
Deduct stockholders’ equity at beginning of year
($300,000 – $130,000). ................................................................... (170,000)
Increase in stockholders’ equity ................................................... $ 180,000
Add dividends ................................................................................ 20,000
Deduct additional issue of common stock .................................. (50,000)
Increase due to net income ........................................................... $ 150,000
Add expenses ................................................................................. 70,000
Revenue ..................................................................................... (b) $ 220,000
KS Stockholders’ equity at end of year ($660,000 – $360,000)......... $ 300,000
Deduct stockholders’ equity at beginning of year
($550,000 – $325,000) .................................................................... (225,000)
Increase in stockholders’ equity ................................................... $ 75,000
Add decrease due to net loss ($115,000 – $130,000) .................. 15,000
Deduct additional issue of common stock ................................... (100,000)
Dividends................................................................................... (c) $ (10,000)
MT Stockholders’ equity at end of year ($1,200,000 – $700,000)...... $ 500,000
Add decrease due to net loss ($420,000 – $480,000) .................. 60,000
Add dividends ................................................................................ 90,000
Deduct additional issue of common stock .................................. (100,000)
Stockholders’ equity at beginning of year ................................... $ 550,000
Add liabilities at beginning of year ............................................... 350,000
Assets at beginning of year ..................................................... (d) $ 900,000
7
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, E1–16
a. MONTANA INTERIORS
Balance Sheet
October 31, 20Y8
Assets
Cash ................................................................................. $110,000
Accounts receivable ....................................................... 75,000
Supplies ........................................................................... 15,000
Total assets ..................................................................... $200,000
Liabilities
Accounts payable............................................................ $ 40,000
Stockholders’ Equity
Common stock ................................................................ $ 60,000
Retained earnings ........................................................... 100,000* 160,000
Total liabilities and stockholders’ equity ...................... $200,000
*$100,000 = $110,000 + $75,000 + $15,000 – $40,000 – $60,000
MONTANA INTERIORS
Balance Sheet
November 30, 20Y8
Assets
Cash ................................................................................. $ 140,000
Accounts receivable ....................................................... 118,000
Supplies ........................................................................... 20,000
Total assets ..................................................................... $ 278,000
Liabilities
Accounts payable............................................................ $ 65,000
Stockholders’ Equity
Common stock ................................................................ $ 60,000
Retained earnings ........................................................... 153,000** 213,000
Total liabilities and stockholders’ equity ...................... $ 278,000
**$153,000 = $140,000 + $118,000 + $20,000 – $65,000 – $60,000
8
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
