Compute the missing amount in the accounting equation for each entity from the financial information presented:
Assets Liabilities Equity
Hair Styles $ ? $ 36,000 $ 36,000
Style Cuts 90,000 ? 48,000
Your Basket 101,000 68,000 ?
Assets equals: $72,000
Assets is calculated as follows:
Liabilities is calculated as follows:
Equity is calculated as follows:
Thus, in case of Hair styles’ assets equals $72,000, Style Cuts’ liabilities equals $42,000, and Your Basket’s equity equals $33,000.
Canyon Canoe Company is a service-based company that rents canoes for use on local lakes and rivers. Amber and Zack Wilson graduated from college about 10 years ago. They both worked for one of the “Big Four” accounting firms and became CPAs. Because they both love the outdoors, they decided to begin a new business that will combine their love of outdoor activities with their business knowledge. Amber and Zack decide that they will create a new corporation, Canyon Canoe Company, or CCC for short. The business began operations on November 1, 2018. Nov. 1 Received $16,000 cash to begin the company and issued common stock to Amber and Zack. 2 Signed a lease for a building and paid $1,200 for the first month’s rent. 3 Purchased canoes for $4,800 on account. 4 Purchased office supplies on account, $750. 7 Earned $1,400 cash for rental of canoes. 13 Paid $1,500 cash for wages. 15 Paid $50 dividends to stockholders. 16 Received a bill for $150 for utilities. (Use separate payable account.) 20 Received a bill for $175 for cell phone expenses. (Use separate payable account.) 22 Rented canoes to Early Start Daycare on account, $3,000. 26 Paid $1,000 on account related to the November 3, 2018, purchase. 28 Received $750 from Early Start Daycare for canoe rental on November 22, 2018. 30 Paid $100 dividends to stockholders. Requirements 4. Prepare the balance sheet as of November 30, 2018.
Presented here are the accounts of Pembroke Bookkeeping Company for the year ended December 31, 2018: Land $ 10,000 Common Stock $ 29,000 Notes Payable 31,000 Accounts Payable 7,000 Property Tax Expense 3,100 Accounts Receivable 1,200 Dividends 28,000 Advertising Expense 12,000 Rent Expense 7,000 Building 147,400 Salaries Expense 64,000 Cash 2,800 Salaries Payable 800 Equipment 15,000 Service Revenue 192,000 Insurance Expense 1,700 Office Supplies 12,000 Interest Expense 6,600 Retained Earnings, Dec. 31, 2017 51,000 Requirements 1. Prepare Pembroke Bookkeeping Company’s income statement. 2. Prepare the statement of retained earnings. 3. Prepare the balance sheet
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