Mathematics

Question one:

Assets=liabilities+equity

  1. Assets= 42000+56000

=$9,800

  1. Liabilities=115000-77000

=$38,000

  1. Equity=54000-18500

=$35,500

Question two:

  1. equity=425000-260000

=$165,000

  1. total assets= 425000+73000

=$298,000

Total liability= 260000+32000

=$292,000

Total equity= 298000-292000

=$6,000

  1. total assets =425000-52000

=$373,000

Total equity=165000+35000

=$200,000

Total liabilities=373000-200000

=$173,000

Question three

Balance sheet

  • assets
  • liabilities
  • stockholders’ equity

Income statement

  • revenue
  • expenses
  • net change in cash

Retained earnings statement

  • dividends

Statement of cash flows

  • cash flows from operating activities

Question four

             Current assets.

  • Cash
  • Inventory
  • Accounts receivable

 

Property land and equipment

  • Machinery

Intangible assets

  • Copyright

Current liabilities

  • Accounts payable

Long term liabilities

  • Notes payable due in 5 years.
  • Accumulated depreciation.

Contributed capital                                                                                                                            

  • Common stock

Retained earnings

  • Net income less dividends

Question five

CAVERNOUS HOME INC BALANCE SHEET PREPARED AS AT DECEMBER 31ST          2013

Assets :

Cash                               $3,200

Common stock               $7,000

Accounts receivable       $4,500

Retained earnings          $3,800

Liabilities:

Notes payable             $ 5,000

Supplies                      $ 8,100

 

 

 

Question six

Net income= 78000-33200-20500-7000

=$17,300

 

Question seven

Retained earnings=82000+35000-55000-8000

=$54,000

Question seven

  1. Manager-decides if the reported net income will cause the stock price to rise or fall.
  2. Employee-estimates the amount of possible bonus.
  3. Investor-decides if a factory is profitable or should be closed
  4. Creditor-determines if a company will be able to repay its obligation.
  5. Government-determine whether the company paid the proper amount of taxes