CHAPTER 1

EX 112
1. c
2. c
3. e
4. d
5. c
6.
7.
8.
9.
10.

a
e
a
e
e

Prob. 11B
1.
Assets

Cash
a.
b.
Bal.
c.
Bal.
d.
Bal.
e.
Bal.
f.
Bal.
g.
Bal.
h.
Bal.
i.
Bal.
j.
Bal.

Ana
Accts.
Accts.
Urbin,
+ Rec. + Supplies = Payable + Capital

+ 40,000

40,000
800
39,200
7,250
46,450
2,500
43,950
1,400
42,550
2,000
40,550

40,550
3,000
37,550

Ana
Urbin
Fees
Rent
Sal.
Supp.
Auto
Misc.
Drawing + Earned Exp. Exp. Exp. Exp. Exp.

+ 40,000
+ 1,500
1,500
1,500
1,500
1,500
1,500

40,550

Owners
Equity

= Liabilities +

+ 9,350
9,350
9,350

+ 1,500
1,500
800
700
700
700
700

40,000
40,000
40,000

1,000
1,000

400
400

1,000
1,100
7,250 2,500 2,000 1,100 1,000
+ 9,350
16,600 2,500 2,000 1,100 1,000

400

16,600 2,500 2,000 1,100 1,000

400

40,000

7,250 2,500
2,000
7,250 2,500 2,000

700

40,000

700

40,000

400

700

40,000

700

2,500
7,250 2,500

40,000

1,500
1,100
400

400

+ 7,250
7,250

40,000

3,000
3,000

400
400

2.
Owners equity is the right of owners to the assets of the business. These rights are increased by owners
investments and revenues and decreased by owners withdrawals and expenses.

Prob. 12B
1.

ABYSS TRAVEL SERVICE

Income Statement
For the Year Ended June 30, 2008

Fees earned ........................................................................

Expenses:
Wages expense ...........................................................
Rent expense ...............................................................
Utilities expense ..........................................................
Supplies expense ........................................................
Taxes expense.............................................................
Miscellaneous expense ..............................................
Total expenses.........................................................
Net income ..........................................................................
2.

$145,400
50,600
31,200
8,250
6,400
3,150
245,000
$130,000

ABYSS TRAVEL SERVICE

Statement of Owners Equity
For the Year Ended June 30, 2008

Megan Koch, capital, July 1, 2007.....................................

Net income for the year .....................................................
Less withdrawals................................................................
Increase in owners equity ................................................
Megan Koch, capital, June 30, 2008 .................................
3.

$ 60,000
$130,000
50,000
80,000
$140,000

ABYSS TRAVEL SERVICE

Balance Sheet
June 30, 2008
Assets

Cash .................................
Accounts receivable .......
Supplies ...........................

Total assets

$375,000

Liabilities

$ 99,500
48,750
4,250

$152,500

Accounts payable ..........

$ 12,500

Owners Equity

Megan Koch, capital ......

Total liabilities and
owners equity

140,000
$152,500