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Accounting Homework

In: Business and Management

Submitted By berg1240
Words 1184
Pages 5
At the beginning of the year, Hernandez Company had total assets of $800,000 and total liabilities of $500,000. Answer the following questions. (a) If total assets increased $150,000 during the year and total liabilities decreased $80,000, what is the amount of owner's equity at the end of the year?

$530,000 is the amount of owner’s equity.

(b) During the year, total liabilities increased $100,000 and owner's equity decreased $70,000. What is the amount of total assets at the end of the year?

$830,000 is the amount of assets.

(c) If total assets decreased $80,000 and owner's equity increased $120,000 during the year, what is the amount of total liabilities at the end of the year?

$300,000 is the amount of liabilities.

Follow the same format as BE1-6 above. Determine the effect on assets, liabilities, and owner's equity of the following three transactions. (a) Invested cash in the business.

Assets increase, liabilities have no effect, and owner’s equity increases.

(b) Withdrawal of cash by owner.

Assets decrease, liabilities have no effect, and owner’s equity decreases.

(c) Received cash from a customer who had previously been billed for services provided.

Assets increase in cash and decrease in accounts receivable, liabilities have no effect, and owner’s equity has no effect.

Classify each of the following items as owner's drawing (D), revenue (R), or expense (E). (a) _____E____ Advertising expense

(b) _____R____ Commission revenue

(c) _____E____ Insurance expense

(d) ______E___ Salaries expense

(e) _____D____ Bergman, Drawing

(f) _____R____ Rent revenue

(g) _____E____ Utilities expense

List the numbers of the above transactions and describe the effect of each transaction on assets, liabilities, and owner's…...

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