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Principles of Accounting, Volume 1: Financial Accounting

Problem Set B

Principles of Accounting, Volume 1: Financial AccountingProblem Set B
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PB 1.

LO 2.1The following information is taken from the records of Rosebloom Flowers for the year 2019.

Revenues: January 36,425; Gains: February 2,820; Losses: March 8,695; Expenses: February 50,807; Gains: January 0; Revenues: March 53,580; Losses: February 3,760; Expenses: March 58,985; Losses: January 0; Revenues: February 88,243; Expenses: January 48,786; Gains: March 13,160.
  1. Calculate net income or net loss for January.
  2. Calculate net income or net loss for February.
  3. Calculate net income or net loss for March.
  4. For each situation, comment on how a stakeholder might view the firm’s performance. (Hint: think about the source of the income or loss.)
PB 2.

LO 2.1Each situation below relates to an independent company’s Owners’ Equity.

Beginning Balance plus Net Income minus Net Loss plus Investments minus Distributions equals Ending Balance, respectively: 163,800, 16,500, 0, ?, 1,750, 254,150; 63,180, 0, 12,000, 0, 51,180, ?; 0, 0, ?, 150,000, 0, 101,400.
  1. Calculate the missing values.
  2. Based on your calculations, make observations about each company.
PB 3.

LO 2.1The following information is from a new business. Comment on the year-to-year changes in the accounts and possible sources and uses funds (how were the funds obtained and used).

Assets minus Liabilities equals Owner’s Equity, respectively: End of Year 1: 137,000, 62,000, 75,000; End of Year 2: 148,000, 57,000, 91,000; End of Year 3: 168,000, 80,000, 88,000.
PB 4.

LO 2.1Each of the following situations relates to a different company.

Revenues, Expenses, Gains, Losses, and Net Income (Loss) respectively: Company A ?, 455,490, 0, 32,760, 32,130; Company B 1,480,500, 1,518,300, ?, 0, 39,690; Company C 103,950, 78,120, 4,725, 5,670, ?; Company D 1,054,116, ?, 8,505, 39,312, (58,275).
  1. For each of these independent situations, find the missing amounts.
  2. How would stakeholders view the financial performance of each company? Explain.
PB 5.

LO 2.2For each of the following independent transactions, indicate whether there was an increase, decrease, or no impact on each financial statement element.

 
Transaction Assets Liabilities Owners’ Equity
Received cash for sale of asset (no gain or loss)      
Cash distribution to owner      
Cash sales      
Investment by owners      
Owe vendor for inventory purchase      
Table 2.10
PB 6.

LO 2.2Mateo’s Maple Syrup had the following transactions during the month of February, its first month in business.

Transaction, Amount, Asset equals Liability plus Owner’s Equity (respectively): Common stock sold, $3,000, 3,000, 0, 3,000; Amount owed for tax expense, 1,950, ?, ?, ?; Amount owed for insurance expense, 750, ?, ?, ?; Syrup sales: cash 13,000, ?, ?, ?; Syrup sales: credit 6,000, ?, ?, ? Dividends paid 40, ?, ?, ?; Collections of credit sales 1,700, ?, ?, ?; Cash purchase of supplies expenses 250, ?, ?, ?; Cash paid for amounts owed 1,600, ?, ?, ?; Utility expenses paid 400, ?, ?, ?; Taxes paid 600, ?, ?, ?; Current Totals: - , 3,000, 0, 3,000.

Complete the chart to determine the ending balances. As an example, the first transaction has been completed. Note: negative amounts should be indicated with minus signs (–).

(Hints: 1. each transaction will involve two financial statement elements; 2. the net impact of the transaction may be $0.)

PB 7.

LO 2.2Using the information in Exercise 2.6, determine the amount of revenue and expenses for Mateo’s Maple Syrup for the month of February.

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