Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled. To calculate: The net income, asset and liabilities of five different companies are required.

Question

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Answer 1

Question

Chapter 1, Problem 2PSB

1.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

1.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company V

Amount of Equity on Dec 31, 2017

Asset= Liabilities+Equity

$54,000=$25,000+$29,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$59,000=$36,000+$23,000

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$29,000
Stock issuance	$5,000
	$34,000
Net Loss	($5,500)
Cash dividends	$5,500
Equity, December 31, 2018	$23,000

2.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

2.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company W

Amount of Equity on Dec 31, 2017

Asset= Liabilities+Equity

$80,000=$60,000+$20,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$100,000=$28,000+$72,000

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$20,000
Stock issuance	$20,000
Net income	$40,000
	$80,000
Cash dividends	$2,000
Equity, December 31, 2018	$72,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$100,000=$28,000+$72,000

3.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

3.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company X

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$73,000
Stock issuance	$29,200
Net income	$18,500
	$120,700
Cash dividends	0
Equity, December 31, 2018	$120,700

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company Y

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$41,000
Stock issuance	$48,100
Net income	$24,000
	$113,100
Cash dividends	$20,000
Equity, December 31, 2018	$93,100

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$135,100=$42,000+$93,100

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company Z

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$44,000
Stock issuance	$60,000
Net income	$32,000
	$136,000
Cash dividends	$8,000
Equity, December 31, 2018	$128,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$144,000=$100,000+$44,000

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Answer 2

Question

Chapter 1, Problem 2PSB

1.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

1.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company V

Amount of Equity on Dec 31, 2017

Asset= Liabilities+Equity

$54,000=$25,000+$29,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$59,000=$36,000+$23,000

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$29,000
Stock issuance	$5,000
	$34,000
Net Loss	($5,500)
Cash dividends	$5,500
Equity, December 31, 2018	$23,000

2.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

2.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company W

Amount of Equity on Dec 31, 2017

Asset= Liabilities+Equity

$80,000=$60,000+$20,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$100,000=$28,000+$72,000

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$20,000
Stock issuance	$20,000
Net income	$40,000
	$80,000
Cash dividends	$2,000
Equity, December 31, 2018	$72,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$100,000=$28,000+$72,000

3.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

3.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company X

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$73,000
Stock issuance	$29,200
Net income	$18,500
	$120,700
Cash dividends	0
Equity, December 31, 2018	$120,700

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company Y

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$41,000
Stock issuance	$48,100
Net income	$24,000
	$113,100
Cash dividends	$20,000
Equity, December 31, 2018	$93,100

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$135,100=$42,000+$93,100

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company Z

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$44,000
Stock issuance	$60,000
Net income	$32,000
	$136,000
Cash dividends	$8,000
Equity, December 31, 2018	$128,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$144,000=$100,000+$44,000

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Answer 3

Question

Chapter 1, Problem 2PSB

1.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

1.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company V

Amount of Equity on Dec 31, 2017

Asset= Liabilities+Equity

$54,000=$25,000+$29,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$59,000=$36,000+$23,000

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$29,000
Stock issuance	$5,000
	$34,000
Net Loss	($5,500)
Cash dividends	$5,500
Equity, December 31, 2018	$23,000

2.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

2.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company W

Amount of Equity on Dec 31, 2017

Asset= Liabilities+Equity

$80,000=$60,000+$20,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$100,000=$28,000+$72,000

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$20,000
Stock issuance	$20,000
Net income	$40,000
	$80,000
Cash dividends	$2,000
Equity, December 31, 2018	$72,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$100,000=$28,000+$72,000

3.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

3.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company X

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$73,000
Stock issuance	$29,200
Net income	$18,500
	$120,700
Cash dividends	0
Equity, December 31, 2018	$120,700

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company Y

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$41,000
Stock issuance	$48,100
Net income	$24,000
	$113,100
Cash dividends	$20,000
Equity, December 31, 2018	$93,100

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$135,100=$42,000+$93,100

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company Z

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$44,000
Stock issuance	$60,000
Net income	$32,000
	$136,000
Cash dividends	$8,000
Equity, December 31, 2018	$128,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$144,000=$100,000+$44,000

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Answer 4

Question

Chapter 1, Problem 2PSB

1.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

1.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company V

Amount of Equity on Dec 31, 2017

Asset= Liabilities+Equity

$54,000=$25,000+$29,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$59,000=$36,000+$23,000

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$29,000
Stock issuance	$5,000
	$34,000
Net Loss	($5,500)
Cash dividends	$5,500
Equity, December 31, 2018	$23,000

2.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

2.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company W

Amount of Equity on Dec 31, 2017

Asset= Liabilities+Equity

$80,000=$60,000+$20,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$100,000=$28,000+$72,000

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$20,000
Stock issuance	$20,000
Net income	$40,000
	$80,000
Cash dividends	$2,000
Equity, December 31, 2018	$72,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$100,000=$28,000+$72,000

3.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

3.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company X

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$73,000
Stock issuance	$29,200
Net income	$18,500
	$120,700
Cash dividends	0
Equity, December 31, 2018	$120,700

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company Y

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$41,000
Stock issuance	$48,100
Net income	$24,000
	$113,100
Cash dividends	$20,000
Equity, December 31, 2018	$93,100

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$135,100=$42,000+$93,100

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company Z

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$44,000
Stock issuance	$60,000
Net income	$32,000
	$136,000
Cash dividends	$8,000
Equity, December 31, 2018	$128,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$144,000=$100,000+$44,000

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Answer 5

Chapter 1, Problem 2PSB

1.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

1.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company V

Amount of Equity on Dec 31, 2017

Asset= Liabilities+Equity

$54,000=$25,000+$29,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$59,000=$36,000+$23,000

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$29,000
Stock issuance	$5,000
	$34,000
Net Loss	($5,500)
Cash dividends	$5,500
Equity, December 31, 2018	$23,000

2.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

2.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company W

Amount of Equity on Dec 31, 2017

Asset= Liabilities+Equity

$80,000=$60,000+$20,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$100,000=$28,000+$72,000

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$20,000
Stock issuance	$20,000
Net income	$40,000
	$80,000
Cash dividends	$2,000
Equity, December 31, 2018	$72,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$100,000=$28,000+$72,000

3.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

3.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company X

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$73,000
Stock issuance	$29,200
Net income	$18,500
	$120,700
Cash dividends	0
Equity, December 31, 2018	$120,700

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company Y

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$41,000
Stock issuance	$48,100
Net income	$24,000
	$113,100
Cash dividends	$20,000
Equity, December 31, 2018	$93,100

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$135,100=$42,000+$93,100

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company Z

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$44,000
Stock issuance	$60,000
Net income	$32,000
	$136,000
Cash dividends	$8,000
Equity, December 31, 2018	$128,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$144,000=$100,000+$44,000

Answer 6

Chapter 1, Problem 2PSB

1.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

1.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company V

Amount of Equity on Dec 31, 2017

Asset= Liabilities+Equity

$54,000=$25,000+$29,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$59,000=$36,000+$23,000

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$29,000
Stock issuance	$5,000
	$34,000
Net Loss	($5,500)
Cash dividends	$5,500
Equity, December 31, 2018	$23,000

Answer 7

Chapter 1, Problem 2PSB

1.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Answer 8

1.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Answer 9

1.

Expert Solution

Answer 10

1.

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Company V

Amount of Equity on Dec 31, 2017

Asset= Liabilities+Equity

$54,000=$25,000+$29,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$59,000=$36,000+$23,000

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$29,000
Stock issuance	$5,000
	$34,000
Net Loss	($5,500)
Cash dividends	$5,500
Equity, December 31, 2018	$23,000

Answer 13

2.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

2.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company W

Amount of Equity on Dec 31, 2017

Asset= Liabilities+Equity

$80,000=$60,000+$20,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$100,000=$28,000+$72,000

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$20,000
Stock issuance	$20,000
Net income	$40,000
	$80,000
Cash dividends	$2,000
Equity, December 31, 2018	$72,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$100,000=$28,000+$72,000

Answer 14

2.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Answer 15

2.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Answer 16

2.

Expert Solution

Answer 17

2.

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Company W

Amount of Equity on Dec 31, 2017

Asset= Liabilities+Equity

$80,000=$60,000+$20,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$100,000=$28,000+$72,000

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$20,000
Stock issuance	$20,000
Net income	$40,000
	$80,000
Cash dividends	$2,000
Equity, December 31, 2018	$72,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$100,000=$28,000+$72,000

Answer 20

3.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

3.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company X

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$73,000
Stock issuance	$29,200
Net income	$18,500
	$120,700
Cash dividends	0
Equity, December 31, 2018	$120,700

Answer 21

3.

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Answer 22

3.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Answer 23

3.

Expert Solution

Answer 24

3.

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

Company X

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$73,000
Stock issuance	$29,200
Net income	$18,500
	$120,700
Cash dividends	0
Equity, December 31, 2018	$120,700

Answer 27

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company Y

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$41,000
Stock issuance	$48,100
Net income	$24,000
	$113,100
Cash dividends	$20,000
Equity, December 31, 2018	$93,100

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$135,100=$42,000+$93,100

Answer 28

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Answer 29

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Answer 30

Expert Solution

Answer 31

Expert Solution

Answer 32

Expert Solution

Answer 33

Explanation of Solution

Company Y

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$41,000
Stock issuance	$48,100
Net income	$24,000
	$113,100
Cash dividends	$20,000
Equity, December 31, 2018	$93,100

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$135,100=$42,000+$93,100

Answer 34

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Explanation of Solution

Company Z

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$44,000
Stock issuance	$60,000
Net income	$32,000
	$136,000
Cash dividends	$8,000
Equity, December 31, 2018	$128,000

Amount of Equity on Dec 31, 2018

Asset= Liabilities+Equity

$144,000=$100,000+$44,000

Answer 35

Summary Introduction

Introduction: Asset of the company is the source of income for the company which can be controlled by the board of directors. Asset helps to generate income for various purposes like for dividend and interest distribution to shareholders and debenture holders. Whereas Liabilities are obligations for the company that are needed to pay off or write off accordingly. In a simple way, liabilities are credit for the company which needs to be fulfilled.

To calculate: The net income, asset and liabilities of five different companies are required.

Answer 36

Expert Solution

Answer to Problem 2PSB

The Equity and Liabilities of the company are computed and net income and loss of the company too are computed.

Answer 37

Expert Solution

Answer 38

Expert Solution

Answer 39

Expert Solution

Answer 40

Explanation of Solution

Company Z

Statement of shareholder’s equity

Particulars	Amount
Equity, December 31, 2017	$44,000
Stock issuance	$60,000
Net income	$32,000
	$136,000
Cash dividends	$8,000
Equity, December 31, 2018	$128,000