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    Homework   1.1  1.2   2.1  2.2  3.1  3.2   4.1  4.2  5.1  5.2   6.1   6.2  7.1  7.2  8.1  8.2  9.1  9.2  10.1   10.2  11.1   11.2  12.1  12.2   13.1  13.2

Identify how each of the following separate transactions 1 through 10 affects financial statements.
 
ü  For increases, place a “+” and the dollar amount in the column or columns.
ü  For decreases, place a “−” and the dollar amount in the column or columns.
ü  Some cells may contain both an increase (+) and a decrease (−) along with dollar amounts.
ü  The first transaction is completed as an example.
ü  For the balance sheet, identify how each transaction affects total assets, total liabilities, and total equity.
ü  For the income statement, identify how each transaction affects net income.
ü  For the statement of cash flows, identify how each transaction affects cash flows from operating activities,
ü  cash flows from investing activities, and cash flows from financing activities.
 

   
Gabi Gram started The Gram Co., a new business that began operations on May 1.
The Gram Co. completed the following transactions during its first month of operations.

• May 1 G. Gram invested $43,500 cash in the company in exchange for its common stock.
• May 1 The company rented a furnished office and paid $2,200 cash for May’s rent.
• May 3 The company purchased $1,940 of office equipment on credit.
• May 5 The company paid $770 cash for this month’s cleaning services.
• May 8 The company provided consulting services for a client and immediately collected $5,600 cash.
• May 12 The company provided $2,500 of consulting services for a client on credit.
• May 15 The company paid $730 cash for an assistant’s salary for the first half of this month.
• May 20 The company received $2,500 cash payment for the services provided on May 12
• May 22 The company provided $3,800 of consulting services on credit.
• May 25 The company received $3,800 cash payment for the services provided on May 22.
• May 26 The company paid $1,940 cash for the office equipment purchased on May 3.
• May 27 The company purchased $90 of office equipment on credit.
• May 28 The company paid $730 cash for an assistant’s salary for the second half of this month.
• May 30 The company paid $350 cash for this month’s telephone bill.
• May 30 The company paid $260 cash for this month’s utilities.

May 31 The company paid $1,400 cash in dividends to the owner (sole shareholder).
 
Enter the amount of each transaction on individual items of the accounting equation.
Do not determine new account balances after each transaction.
(Enter the transactions in the given order. Enter reductions to account balances with a minus sign.
Select “NA” if the transaction does not include an expense.)
 
Gabi Gram started The Gram Co., a new business that began operations on May 1.
The Gram Co. completed the following transactions during its first month of operations.

• May 1 G. Gram invested $43,500 cash in the company in exchange for its common stock.
• May 1 The company rented a furnished office and paid $2,200 cash for May’s rent.
• May 3 The company purchased $1,940 of office equipment on credit.
• May 5 The company paid $770 cash for this month’s cleaning services.
• May 8 The company provided consulting services for a client and immediately collected $5,600 cash.
• May 12 The company provided $2,500 of consulting services for a client on credit.
• May 15 The company paid $730 cash for an assistant’s salary for the first half of this month.
• May 20 The company received $2,500 cash payment for the services provided on May 12
• May 22 The company provided $3,800 of consulting services on credit.
• May 25 The company received $3,800 cash payment for the services provided on May 22.
• May 26 The company paid $1,940 cash for the office equipment purchased on May 3.
• May 27 The company purchased $90 of office equipment on credit.
• May 28 The company paid $730 cash for an assistant’s salary for the second half of this month.
• May 30 The company paid $350 cash for this month’s telephone bill.
• May 30 The company paid $260 cash for this month’s utilities.
• May 31 The company paid $1,400 cash in dividends to the owner (sole shareholder).

Prepare income statement for May.

Prepare statement of retained earnings for May.

Prepare balance sheet for May 31.

Prepare statement of cash flows for May.
Sanyu Sony started a new business and completed these transactions during December.
 

Dec.		1		Sanyu Sony transferred $66,400 cash from a personal savings account to a checking account in the name of Sony Electric in exchange for its common stock.
		2		The company rented office space and paid $1,200 cash for the December rent.
		3		The company purchased $14,900 of electrical equipment by paying $6,700 cash and agreeing to pay the $8,200 balance in 30 days.
		5		The company purchased office supplies by paying $800 cash.
		6		The company completed electrical work and immediately collected $1,300 cash for these services.
		8		The company purchased $2,760 of office equipment on credit.
		15		The company completed electrical work on credit in the amount of $6,000.
		18		The company purchased $410 of office supplies on credit.
		20		The company paid $2,760 cash for the office equipment purchased on December 8.
		24		The company billed a client $900 for electrical work completed; the balance is due in 30 days.
		28		The company received $6,000 cash for the work completed on December 15.
		29		The company paid the assistant’s salary of $1,500 cash for this month.
		30		The company paid $530 cash for this month’s utility bill.
		31		The company paid $970 cash in dividends to the owner (sole shareholder).

 
Enter the amount of each transaction on individual items of the accounting equation.
(Enter reductions to account balances with a minus sign.)

   
Sanyu Sony started a new business and completed these transactions during December.
 

Dec.		1		Sanyu Sony transferred $66,400 cash from a personal savings account to a checking account in the name of Sony Electric in exchange for its common stock.
		2		The company rented office space and paid $1,200 cash for the December rent.
		3		The company purchased $14,900 of electrical equipment by paying $6,700 cash and agreeing to pay the $8,200 balance in 30 days.
		5		The company purchased office supplies by paying $800 cash.
		6		The company completed electrical work and immediately collected $1,300 cash for these services.
		8		The company purchased $2,760 of office equipment on credit.
		15		The company completed electrical work on credit in the amount of $6,000.
		18		The company purchased $410 of office supplies on credit.
		20		The company paid $2,760 cash for the office equipment purchased on December 8.
		24		The company billed a client $900 for electrical work completed; the balance is due in 30 days.
		28		The company received $6,000 cash for the work completed on December 15.
		29		The company paid the assistant’s salary of $1,500 cash for this month.
		30		The company paid $530 cash for this month’s utility bill.
		31		The company paid $970 cash in dividends to the owner (sole shareholder).

Prepare an income statement for the current month.

Prepare a statement of retained earnings for the current month.
BMW Group, one of the world’s largest automakers,
reports the following income statement accounts for the year ended December 31, 2015
(euros in millions).
 

Revenues	€	1,029,920
Cost of sales		630,019
Selling and administrative costs		219,339
Other expenses		95,206

Using the above information prepare BMW’s income statement for the year ended December 31, 2015.
(Enter your answers in millions.)
 
Exercise 1-20 Preparing an income statement for a global company LO P2
Ford Motor Company, one of the world’s largest automakers,
reports the following income statement accounts for the year ended December 31, 2015 ($ in millions).
 

Selling and administrative costs	$	222,139
Cost of sales		634,179
Revenues		1,047,720
Other expenses		97,206

Using the above information prepare Ford’s income statement for the year ended December 31, 2015.
(Enter your answers in millions.)

Determine the missing amount from each of the separate situations given below
 

  BMW Group, one of the world’s largest automakers,
reports the following income statement accounts for the year ended December 31, 2015
(euros in millions).
 

Revenues	€	1,029,920
Cost of sales		630,019
Selling and administrative costs		219,339
Other expenses		95,206

Using the above information prepare BMW’s income statement for the year ended December 31, 2015.
(Enter your answers in millions.)
 
Exercise 1-20 Preparing an income statement for a global company LO P2
Ford Motor Company, one of the world’s largest automakers,
reports the following income statement accounts for the year ended December 31, 2015 ($ in millions).
 

Selling and administrative costs	$	222,139
Cost of sales		634,179
Revenues		1,047,720
Other expenses		97,206

Using the above information prepare Ford’s income statement for the year ended December 31, 2015.
(Enter your answers in millions.)

Determine the missing amount from each of the separate situations given below
 

   
On October 1, 2021, Santana Rey launched a computer services company, Business Solutions,
that is organized as a corporation and provides consulting services, computer system installations, and custom program development.
Rey adopts the calendar year for reporting purposes and expects to prepare the company’s first set of financial statements on December 31, 2021.
 

 

 
Explanation
On October 1, Keisha King organized Real Answers, a new consulting firm; on October 3, the owner contributed $84 ,000 cash.
On October 31, the company's records show the following items and amounts.
 

 
Using the above information prepare an October income statement for the business.
 

 
Red text indicates no response was expected. No points were deducted.
   
On October 1, Keisha King organized Real Answers, a new consulting firm; on October 3, the owner
contributed $84,000 cash. On October 3 1, the company's records show the following items and amounts.
 

 
Using the above information prepare an October statement of owner's equity for Real Answers.
 

   
On October 1, Keisha King organized Real Answers, a new consult in g firm; on October 3, the owner contributed $84 ,000 cash.
On October 31, the company's records show the following items and amounts.
 

 
Using the above information prepare an October 31 balance sheet for Real Answers.
 

   
On October 1, Keisha King organized Real Answers, a new consulting firm; on October 3,
the owner invested $84,000 of assets. On October 31, the company's records show the following items and amounts.
 

 

 

Red text indicates no response was expected. No points were deducted.
   
Swiss Group reports net income of $40,000 for 2013.
At the beginning of 2013, Swiss Group had $200,000 in assets. By the end of 20 13, assets had grown to $300,000.
 

 
Match each description with its section from statement of cash flows.
 
If equity is $30,000 and liabilities are $19,000, then assets must equal:
 
$11,000
$19,000
$49,000
$30,000
   
During its first year of operations, Mario Lupo formed Lupo Company as a corporation and personally invested $15,000
in the business in exchange for common stock. Lupo Company also paid dividends of $2,000.
The company earned $35,000 of revenues and incurred $23,000 of expenses. At the end of the year, the company’s equity totaled:
 
$13,000
$15,000
$25,000
$75,000
   
Return on assets measures a company’s ability to generate an adequate return on its investment in:
 
common stock
profitability
revenues
assets
   
The return on assets for your small business was 11.2% last year and 12.6% this year. Your return on assets:
 
Improved
Worsened
Stayed about the same
   
Rosalind Company reported revenues of $111,500, expenses of $92,545, and net income of $18,955 for the year.
Assets totaled $200,000 at the beginning of the year and $246,000 at the end of the year.
The company’s return on assets for the year (round the percent to one decimal) is:
 
8.5%
5.0%
9.5%
11.8%
   
Classify the following business activities using the drop-down list.
 
Happenings that affect the accounting equation                   –         Events
Exchanges of value between two entities      –                      External Transactions
Exchanges within an entity     –                                             Internal Transactions
   
The business pays $2,000 in cash to the landlord for office space rent
Expenses reduce by $2,000
Equity remains unchanged
Equity reduces by $2,000
Assets increase by $2,000
Liabilities reduce by $2,000
   
On January 31, Jean Consulting Company receives a bill for that month’s utilities in the amount of $500.
Jean sets it aside because she does not plan to pay the bill until its due date of February 15.
What effect, if any, does this event have on the company’s accounting equation as of January 31?
 
The business must record this event, which would decrease cash and decrease equity on January 31.
The business must record this event, which would decrease cash and increase equity on January 31.
The business must record this event, which would increase liabilities and decrease equity on January 31.
Because the bill is set aside for payment in February, there would be no effect on the accounting equation as of January 31.
   
The four basic financial statements are:
 
Income Statement, Sheet of retained earnings, Balance statement, and Statement of cash flows.
Income Statement, Statement of earnings, Balance statement, and Statement of cash flows.
Income sheet, Statement of retained earnings, Balance sheet, and Statement of cash flows.
Income Statement, Statement of retained earnings, Balance sheet, and Statement of cash flows.
   
Identify which items belong on the income statement.
 
Accounts receivable, net income, and dividends
Revenue, expenses and net income
Cash, accounts receivable, and common stock
Dividends, beginning retained earnings, ending retained earnings
   
Identify which items belong on the statement of retained earnings.
 
Accounts receivable, net income, and dividends
Revenue, expenses and net income
Cash, accounts receivable, and common stock
Dividends, beginning retained earnings, ending retained earnings
   
Identify which items belong on the balance sheet.
 
Accounts receivable, net income, and dividends
Revenue, expenses and net income
Cash, accounts receivable, and common stock
Dividends, beginning retained earnings, ending retained earnings
   
Identify which items belong on the statement of cash flows.
 
Accounts receivable, net income, and dividends
Cash flows from investing, operating and financing activities
Cash, accounts receivable, and common stock
Dividends, beginning retained earnings, ending retained earnings

    Homework   1.1  1.2   2.1  2.2  3.1  3.2   4.1  4.2  5.1  5.2   6.1   6.2  7.1  7.2  8.1  8.2  9.1  9.2  10.1   10.2  11.1   11.2  12.1  12.2   13.1  13.2