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Accounting CH 1 - Homework
Accounting CH 1 - Homework
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:
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.
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