Accounting CH 1 - Homework

Submitted by: Axel Ong
ID: E11210780
E1.10 (LO 5) Kinney A.Ş. had the following assets and liabilities on the dates
indicated.
December 31 Total Assets Total Liabilities
2024 ₺400,000 ₺250,000
2025 ₺460,000 ₺300,000
2026 ₺590,000 ₺400,000
Kinney began business on January 1, 2024, with an investment of ₺100,000.
Instructions
From an analysis of the change in equity during the year, compute the net income (or
loss) for:
a. 2024, assuming Kinney’s paid ₺12,000 in dividends for the year.
b. 2025, assuming shareholders made an additional investment of ₺34,000 and
Kinney paid no dividends in 2025.
c. 2026, assuming shareholders made an additional investment of ₺12,000 and Kinney
paid dividends of ₺25,000 in 2026.
Answer:
a. Changes in equity in 2024 =$400,000 - $250,000 =$150,000 (Shareholder’s

equity)
$150,000 (shareholder’s equity) - $100,000 (shareholder’s capital) = $50,000
(Retained earnings)
$50,000 (Retained earnings) + $12,000 = $62,000
b. Changes in equity in 2025 = $460,000 - $300,000= $160,000

$160,000 - $150,000 = $10,000
$10,000 - $34,000 = -$24,000
c. Changes in equity in 2026 = $590,000 - $400,000 = $190,000

$190,000 - $160,000 = $30,000
$30,000 - $12,000 + $25,000 = $33,000
E1.11 (LO 5) Two items are omitted from each of the following summaries of
statement of financial position and income statement data for two proprietorships
for the year 2025, Greene’s Goods and Solar Enterprises.
Greene’s Solar Goods Enterprises
Beginning of year:
Total assets €110,000 €129,000
Total liabilities 85,000 (c)
Total equity (a) 80,000
End of year:
Total assets 160,000 180,000
Total liabilities 120,000 50,000
Total equity 40,000 130,000
Changes during year in
equity:
Additional investment (b) 25,000
Dividends 37,000 (d)
Total revenues 220,000 100,000
Total expenses 175,000 60,000
Instructions
Determine the missing amounts.
a. $110,000 (Asset) - $85,000 (Liability) = €25,000

b. $40,000 - $25,000 = €15,000
Retained Earnings = $220,000 - $175,000 - $37,000 = €8,000
Additional Investment = $15,000 - $8,000 = €7,000
c. $129,000 - $80,000 = €49,000
d. $130,000 - $80,000 = $50,000 (Additional Investments + Retained earnings)
Retained Earnings = $100,000 - $60,000 – Dividends = €25,000
$50,000 - $25,000 = €25,000
$100,000 - $60,000 - $25,000 = €15,000 (Dividends)
E1.13 (LO 5) Lynn Dreise is the bookkeeper for Sanculi SpA. Lynn has been trying to
get the statement of financial position of Sanculi to balance correctly. Sanculi’s
statement of financial position is shown as follows.
Sanculi SpA
Statement of Financial Position
December 31, 2025
Assets Liabilities
Equipment €48,000 Share capital-ordinary €50,000
Supplies 8,000 Retained earnings 17,500
Cash 14,000 Accounts payable 16,000
Dividends 5,000 Accounts receivable (8,500)
Total assets €75,000 Total equity and liabilities €75,000
Instructions
Prepare a correct statement of financial position.
Corrected Version
Sanculi SpA
Statement of Financial Position
December 31, 2025
Assets Liabilities
Equipment €48,00 Share capital-ordinary €50,000
0
Supplies 8,000 Retained earnings 17,500
Cash 14,000 Accounts payable 16,000
Total assets €70,00 Total equity and liabilities €83,500
0
P1.2 (LO 4, 5) Ai Fang Co. opened as a new computer services business on August 1,
2025. During August, the following transactions occurred.
1. Shareholders invested ¥20,000 cash in the business in exchange for ordinary
shares.
2. Purchased equipment for ¥2,000, paying ¥1,000 in cash and the balance on
account.
3. Paid ¥600 cash for August office rent.
4. Purchased ¥500 of supplies on account.
5. Recognized revenue of ¥7,500, of which ¥4,000 is collected in cash with the
balance to be collected later.
6. Paid for the supplies purchased in transaction (4).
7. Declared and paid ¥700 dividend.
8. Incurred utility expenses for the month on account ¥270.
9. Paid salaries of ¥2,800 for August.
10. Received ¥2,000 from Standard Bank—money borrowed on a note payable.
Instructions
a. Prepare a tabular analysis of the August transactions. The column headings
should be as follows: Cash + Accounts Receivable + Supplies + Equipment =
Notes Payable + Accounts Payable + Share Capital—Ordinary + Revenues –
Expenses – Dividends.
Asset = Liabilities + Shareholder’s equity

Assets = Liabilities + Shareholders’ equity
Cash Accoun Supplie Equip Note Accou Share Re Expenses Dividneds

ts s ment s nts capital ven
Receiva paya Payabl - ue
ble ble e Ordin
ary
+$20,000 +
$20,0
00
-$1,000 + +
$2,00 $1,000
0
-$600 -$600
+$500 +$500
+$4,000 +$3,500 +
$7,
50
0
-$500 -$500
-$700 -$700
-$270 -$270
-$2,800 -$2,800
+$2,000 +
$2,00
0
Asset = $26,130 Liabilities + Shareholder’s equity = $26,130
b. Prepare an income statement and a retained earnings statement for August, and a
statement of financial position at August 31, 2025, for Ai Fang Co.
Ai Fang Co.
Income Statement
For the Month ended August 31, 2025
Revenue $7,500
Expenses:
Rent Expense $600
Utility Expense $270
Salary Expense $2,800
Total Expense $3670
Net Income $3,830
Ai Fang Co.
Retained Earnings Statement
For the Month ended J August 31, 2025
Retained earnings August 1, 2025 $0
Add: Net Income $3,830
Less: Dividends $700
Retained Earnings, August 31, 2025 $3,130
Ai Fang Co.
Statement of financial position
For the Month ended August 31, 2025
Assets
Cash $20,130
Account Receivable $3,500
Supplies $500
Equipment $2,000
Total Assets $26,130
Equity and Liabilities
Equity
Share capital – Ordinary $20,000
Retained earnings $3,130
Total Equity $23,130
Liabilities
Accounts payable $1,000
Notes payable $2,000
Total Liabilities $3,000
Total equity and liabilities $26,130

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Submitted by: Axel Ong

a. Changes in equity in 2024 =$400,000 - $250,000 =$150,000 (Shareholder’s

b. Changes in equity in 2025 = $460,000 - $300,000= $160,000

c. Changes in equity in 2026 = $590,000 - $400,000 = $190,000

a. $110,000 (Asset) - $85,000 (Liability) = €25,000

Asset = Liabilities + Shareholder’s equity

Cash Accoun Supplie Equip Note Accou Share Re Expenses Dividneds

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