Problem Set B
Problem Set B
PB 1. The following information is taken from the records of Rosebloom Flowers for the year 2019.
| Revenues: Jan. | $36,425 |
| Gains: Feb. | $2,820 |
| Losses: Mar. | $8,695 |
| Expenses: Feb. | $50,807 |
| Gains: Jan | $0 |
| Revenues: Mar. | $53,580 |
| Losses: Feb. | $3,760 |
| Expenses: Mar. | $58,985 |
| Revenues: Jan. | $48,786 |
| Gains: Mar. | $13,160 |
- Calculate net income or net loss for January.
- Calculate net income or net loss for February.
- Calculate net income or net loss for March.
- 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. Each situation below relates to an independent company’s Owners’ Equity.
| Beginning Balance + | Net Income + | Net Loss + – | Investments – | Distributions = | Ending Balance | |
| Co. 1 | $163,800 | $16,500 | $0 | ? | $1,750 | $254 |
| Co. 2 | $63,180 | $0 | $12,000 | $0 | $51,180 | ? |
| Co. 3 | $0 | $0 | ? | $150,000 | $0 | $101,400 |
- Calculate the missing values.
- Based on your calculations, make observations about each company.
PB 3. The 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 – | Liabilities = | Owner’s Equity | |
| 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. Each of the following situations relates to a different company.
| Company A | Company B | Company C | Company D | |
| Revenues | ? | $1,480,500 | $103,950 | $1,054,116 |
| Expenses | $455,490 | $1,518,300 | $78,120 | ? |
| Gains | $0 | ? | $4,725 | $8,505 |
| Losses | $32,760 | $0 | $5,670 | $39,312 |
| Net Income or (Loss) | $$32,130 | $39,690 | ? | ($58,275) |
- For each of these independent situations, find the missing amounts.
- How would stakeholders view the financial performance of each company? Explain.
PB 5. For 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. Mateo’s Maple Syrup had the following transactions during the month of February, its first month in business.
| Transaction | Amount | Asset – | Liability | Owner’s Equity |
| 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 | ? | ? | ? |
| Dividend paid | $40 | ? | ? | ? |
| Collections of credit sales | $1,700 | ? | ? | ? |
| Cash purchase for supplies expenses | $250 | ? | ? | ? |
| Cash paid for amounts owed | $1,600 | ? | ? | ? |
| Utility expenses paid | $400 | ? | ? | ? |
| Taxes paid | $600 | ? | ? | ? |
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. Using 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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