Compute the missing amount for Meehan Company
5/21/2018 Bookshelf Online
https://online.vitalsource.com/#/books/9780133867411/cfi/6/46!/4/2/8/10/8/2/4/6/2@0:97.4 1/3
PRINTED BY: [email protected]. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher’s prior permission. Violators will be prosecuted.
E1-22 Using the accounting equation
Learning Objective 3
Star Nursery started 2016 with total assets of $24,000 and total liabilities of $5,000. At the end of 2016, Star Nursery’s total assets stood at $18,000 and total liabilities were $1,000.
Requirements
1. Did the owner’s equity of Star Nursery increase or decrease during 2016? By how much?
2. Identify the four possible reasons that owner’s equity can change.
E1-23 Using the accounting equation
Learning Objective 3
During 2016, Peaceful River Spa reported revenue of $40,000. Total expenses for the year were $35,000. Peaceful River Spa ended the year with total assets of $23,000, and it owed debts totaling $9,000. At year-end 2015, the business reported total assets of $18,000 and total liabilities of $9,000.
Requirements
1. Compute Peaceful River Spa’s net income for 2016. 2. Did Peaceful River Spa’s owner’s equity increase or decrease during 2016? By how
much?
5/21/2018 Bookshelf Online
https://online.vitalsource.com/#/books/9780133867411/cfi/6/46!/4/2/8/10/8/2/4/6/2@0:97.4 2/3
E1-24 Using the accounting equation
Learning Objective 3
The records of Meehan Company show the following at December 31, 2016:
Requirements
1. Compute the missing amount for Meehan Company. You will need to work through owner’s equity.
2. Did Meehan earn a net income or suffer a net loss for the year? Compute the amount.
5/21/2018 Bookshelf Online
https://online.vitalsource.com/#/books/9780133867411/cfi/6/46!/4/2/8/10/8/2/4/6/2@0:97.4 3/3
PRINTED BY: [email protected]. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher’s prior permission. Violators will be prosecuted.