By Luke Thompson

2018/03/29

Accounting Exercises Norman Ulrich is the owner of Metropolitan Cartage Company in Halifax, Nova Scotia. His personal and business assets are listed below. a) Separate the amount list below into the two columns provided. b) Calculate the total assets and the total liabilities in each column. c) Calculate Norm Ulrichâ&#x20AC;&#x2122;s personal net worth and his equity in Metropolitan Cartage Company. Assets His Canada Savings Bonds

Amount

Personal

\$ 10 000

10 000

Accounts Receivable

22 000

22 000

Land

30 000

30 000

Personal Automobile

9 000

9000

3 150

Home Furniture and Appliances

8 250

Trucks and Equipment

84 000

3 150 8 250 84 000

Owner purchased a second house for rental purposes

105 000

105 000

Buildings

120 000

120 000

Office Equipment

24 000

Personal Bank Balance

2 860

Supplies

8 250

House and Lot

24 000 1 860 8 250

86 500

86 500

Total Assets Liabilities Accounts Payable Bank Loan on Office Equipment

Amount

\$ 5 500 9 200

Personal 5 500

9 200

Mortgage on House and Lot

55 000

55 000

Mortgage on Building

65 000

Mortgage on Rental House

75 000

75 000

Personal debt to his father

10 000

10 000

65 000

Total Liabilities Ownerâ&#x20AC;&#x2122;s Equity N. Ulrich, Capital

Personal 247 110

By Luke Thompson

2018/03/29

Classify each of the following as an asset (A) or a liability (L) of ABC Company. a) Accounts receivable A b) Unpaid telephone bill L c) Canada Savings Bonds A d) Bank loan L e) Amount owed to C. Evans L f) Office furniture A g) An amount owed by J. Draper A h) Accounts payable L i) Money in the bank A j) Supplies A

On December 31, 20-1, A. Silver’s accounting equation was as follows: Assets (120 000) – Liabilities (50 000) = Equity (\$70 000) a) If, during 20-2, the assets increased by \$90 000 and the liabilities increased by \$20 000, calculate the owner’s equity at December 31, 20-2. Show your calculations. \$210 000 – \$70 000 = \$140 000 ∴ The Equity would be \$140 000.

b) If a company’s liabilities increase by \$25 000 and its equity decreases by \$5 000, what change occurs in the assets? Show your calculations. \$X – \$75 000 = \$65 000 ∴ \$65 000 + \$75 000 = X ∴ X = \$140 000 ∴ The assets would go up \$20 000

Accounting exercise
Accounting exercise