Accounting Exercises

Norman Ulrich is the owner of Metropolitan Cartage Company in Halifax, Nova Scotia.
His personal and business assets are listed below.
a) Separate the amount list below into the two columns provided.
b) Calculate the total assets and the total liabilities in each column.
c) Calculate Norm Ulrichs personal net worth and his equity in Metropolitan Cartage Company.

Assets Amount Business Personal

His Canada Savings Bonds $ 10 000 $10 000
Accounts Receivable 22 000 $22 000
Land 30 000 $30 000
Personal Automobile 9 000 $9 000
Business Bank Balance 3 150 $3 150
Home Furniture and Appliances 8 250 $8 250
Trucks and Equipment 84 000 $84 000
Owner purchased a second house for rental purposes 105 000 $105 000
Buildings 120 000 $120 000
Office Equipment 24 000 $24 000
Personal Bank Balance 2 860 $2 860
Supplies 8 250 $8 250
House and Lot 86 500 $86 500
Total Assets $396 400 $116 610

Liabilities Amount Business Personal

Accounts Payable $ 5 500 $5 500
Bank Loan on Office Equipment 9 200 $9 200
Mortgage on House and Lot 55 000 $55 000
Mortgage on Building 65 000 $65 000
Mortgage on Rental House 75 000 $75 000
Personal debt to his father 10 000 $10 000
Total Liabilities $154 700 $65 000

Owners Equity Business Personal

N. Ulrich, Capital $241 700 $51 610
Classify each of the following as an asset (A) or a liability (L) of ABC Company.
a) Accounts receivable ________A
b) Unpaid telephone bill ________L
c) Canada Savings Bonds ________A
d) Bank loan ________L
e) Amount owed to C. Evans ________L
f) Office furniture ________A
g) An amount owed by J. Draper ________A
h) Accounts payable ________L
i) Money in the bank ________A
j) Supplies _______A

On December 31, 20-1, A. Silvers accounting equation was as follows:

Assets (120 000) Liabilities (50 000) = Equity ($70 000)
a) If, during 20-2, the assets increased by $90 000 and the liabilities increased by $20 000, calculate
the owners equity at December 31, 20-2. Show your calculations.
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____________________________________________________________________________________

120,000+90,000=210,000 50,000+20,000=70,000 210,000-70,000=140,000

Therefore on December 31 the owners equity would be $140,000

b) If a companys liabilities increase by $25 000 and its equity decreases by $5 000, what change
occurs in the assets? Show your calculations.
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____________________________________________________________________________________
Assets=Liabiltity+Equity
A=25 000-5 000
A=20 000

Therefore the assets had a $20 000 increase