Name:__________________________
ACC 101 Chapter 2 Worksheet B
Dru Macasieb, MBA
1
Problem 1: The Accounting Equation
Dr. Abe Miller is a general practitioner. As of December 31, Miller owned the following assets related to the professional practice:
Cash
$3,300
X-ray equipment
$7,000
Office equipment
$4,500
Laboratory equipment
$4,000
As of that date, Miller owed business suppliers as follows:
General Office Equipment Inc.
$3,300
Young Medical Supply Company
$4,500
Buck Gas Company
$1,200
Required:
1. Compute the amount of assets, liabilities, and owner’s equity as of December 31.
ASSETS
=
LIABILITIES
+
OWNER’S EQUITY
_________________
=
__________________
+
__________________
2. Assuming that during January there is an increase of $4,600 in Dr. Miller’s business assets and an increase of $2,500 in
business liabilities, compute the resulting accounting equation as of January 31.
ASSETS
_________________
=
LIABILITIES
+ OWNER’S EQUITY
= __________________ +
__________________
3. Assuming that during February there is a decrease of $1,500 in assets and a decrease of $1,200 in liabilities, compute the
resulting accounting equation as of February 28.
ASSETS
_________________
=
LIABILITIES
+ OWNER’S EQUITY
= __________________ +
__________________
4. Assuming that Dr. Miller made no addition investments or withdrawals, compute the net income or loss for each month.
Problem 2: Effects of Transactions on Accounting Equation
Susan Cole started her own consulting business in October 20--. During the first month, the following transactions occurred:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
Invested $12,000 cash in the business.
Purchased office equipment for $7,500.
Purchased computer equipment for cash $800.
Received $700 cash from a client for service rendered.
Paid $600 office rent for the month.
Paid student assistant wages for the month, $150
Paid one-year insurance premium, $200.
Paid $3,000 on account for the office equipment purchased in transaction (b).
Withdrew cash for personal use, $100.
1. Record the effect of each of the transactions from the previous page on the accounting equation chart provided below. Following
transaction (i), compute the new amounts in the accounts.
Assets
=
Items Owned
=
Liabilities +
Amounts
+
Owner’s Equity
Owner’s Investment
+
Earnings
Owed
Cash
Office
Prepaid
+
Equip. +
Insur.
=
Accounts
Payable
S. Cole,
+
S. Cole,
Capital
-
Drawing +
Revenues
-
Expenses
Bal.
______
+
______ +
______
=
_________ +
_______
-
_______ +
__________
-
_________
(a)
______
+
______ +
______
=
_________ +
_______
-
_______ +
__________
-
_________
(b)
______
+
______ +
______
=
_________ +
_______
-
_______ +
__________
-
_________
(c)
______
+
______ +
______
=
_________ +
_______
-
_______ +
__________
-
_________
(d)
______
+
______ +
______
=
_________ +
_______
-
_______ +
__________
-
_________
(e)
______
+
______ +
______
=
_________ +
_______
-
_______ +
__________
-
_________
(f)
______
+
______ +
______
=
_________ +
_______
-
_______ +
__________
-
_________
(g)
______
+
______ +
______
=
_________ +
_______
-
_______ +
__________
-
_________
(h)
______
+
______ +
______
=
_________ +
_______
-
_______ +
__________
-
_________
(i)
______
+
______ +
______
=
_________ +
_______
-
_______ +
__________
-
_________
Bal.
______
+
______ +
______
=
+
_______
-
_______ +
__________
-
_________
2. After recording the transactions, compute the following:
Total Assets
__________________
Total Liabilities
__________________
Owner’s Equity
__________________
Change in Owner’s Equity from original investment
__________________
Total Revenue
__________________
Total Expenses
__________________
Net Income/loss
__________________
Problem 3: The Income Statement
Based on the transactions, reported in problem 2, prepare an income statement for Susan Cole Consulting Services for the month
ended October 31, 20--, in the form provided below.
Problem 4: Statement of Owner’s Equity
Based on the transactions, reported in problem 2, prepare a Statement of Owner’s Equity for Susan Cole Consulting Services for
the month ended October 31, 20--, in the form provided below.
Problem 5: The Balance Sheet
Based on the transactions, reported in problem 2, prepare a Balance Sheet Susan Cole Consulting Services for the month ended
October 31, 20--, in the form provided below.