1. Accounting Equation

The total assets and total liabilities for a recent year of Apple (AAPL) and HP (HPQ) formerly Hewlett-Packard are shown below.

	Apple (in millions)	HP (in millions)
Assets	$290,479		$103,206
Liabilities	171,124		76,475

Determine the stockholders' equity of each company.

Apple	$_____ million?
HP	$_____ million?

2. Accounting Equation

The total assets and total liabilities for a recent year of Apple (AAPL) and HP (HPQ) formerly Hewlett-Packard are shown below.

	Apple (in millions)	HP (in millions)
Assets	197,100		87,750
Liabilities	157,680		52,650

Determine the stockholders' equity of each company.

Apple	$____ million?
HP	$____ million?

3. Staples, Inc., (SPLS) is a leading office products distributor, with retail stores in the United States, Canada, Asia, Europe, and South America. The following financial statement data were adapted from recent financial statements of Staples:

	Year 2 (in thousands)	Year 1 (in thousands)
Total assets	$10,313,728		$11,174,876
Total liabilities	(1)	5,042,613
Total stockholders' equity	5,305,059		(2)
Sales	22,492,360
Cost of goods sold	16,691,324
Operating expenses	5,518,665
Other expense (net)	14,236
Income tax expense	133,609

Enter amounts in thousands.

a. Determine the missing data indicated for (1) and (2).

Total liabilities for Year 2	$____ thousand
Total stockholders' equity for Year 1	$____ thousand

b. Using the income statement data for Year 2, determine the amount of net income or net loss.

Choose either Net income or Net loss

$____ thousand

4. Staples, Inc., (SPLS), is a leading office products distributor, with retail stores in the United States, Canada, Asia, Europe, and South America. The following financial statement data were adapted from recent financial statements of Staples:

	Year 2 (in thousands)	Year 1 (in thousands)
Total assets	$15,232,627		$15,386,492
Total liabilities	(1)	7,693,246
Total stockholders' equity	8,377,945		(2)
Sales	26,880,364
Cost of goods sold	14,784,200
Operating expenses	5,048,492
Other expense (net)	233,372
Income tax expense	475,308

Enter amounts in thousands.

a. Determine the missing data indicated for (1) and (2).

Total liabilities for Year 2	$____ thousand
Total stockholders' equity for Year 1	$____ thousand

b. Using the income statement data for Year 2, determine the amount of net income or net loss.

Choose either Net income or Net loss

$____ thousand

5. The financial statements at the end of Paradise Realty's first month of operations are shown below.

PARADISE REALTY Income Statement For the Month Ended November 30, 20Y3
Fees earned				$149,300
Operating expenses:
Wages expense		$ (a)
Rent expense		14,400
Supplies expense		12000
Utilities expense		8,100
Miscellaneous expense		4,950
Total operating expenses				(69,300)
Net income				$ (b)

PARADISE REALTY Statement of Stockholders' Equity For the Month Ended November 30, 20Y3
	Common Stock	Retained Earnings	Total
Balances, Nov. 1, 20Y3		$0		$0			$0
Issuance of common stock		270,000					270,000
Net income				(c)			(c)
Dividends				(d)			(d)
Balances, Nov. 30, 20Y3		$270,000		$(e)			$314,000

PARADISE REALTY Balance Sheet November 30, 20Y3
Assets
Cash		$ 99,200
Supplies		6,000
Land		(f)
Total assets		$ (g)
Liabilities
Note payable		$ 7,200
Stockholders' Equity
Common stock	$ (h)
Retained earnings	(i)
Total stockholders' equity		(j)
Total liabilities and stockholders' equity		(k)

PARADISE REALTY Statement of Cash Flows For the Month Ended November 30, 20Y3
Cash flows from operating activities:
Cash received from customers	$ (l)
Deduct cash payments for expenses and payments to creditors	(68,100)
Net cash flows from operating activities		$ (m)
Cash flows used for investing activities:
Cash payments for acquisition of land		(216,000)
Cash flows from financing activities:
Cash received from issuing common stock	$ 270,000
Deduct dividends	(36,000)
Net cash flows from financing activities		(n)
Net increase in cash during month		(o)
Cash as of November 1		0
Cash as of November 30		(o)

Instructions:

1. Would you classify a realty business such as Paradise Realty as a manufacturing, merchandising, or service business?

Choose One:

manufacturing business

merchandising business

service business

2. By analyzing the interrelationships among the financial statements, determine the proper amounts for (a) through (o). Enter all amounts as positive numbers.

a. Wages expense	$?
b. Net income	$?
c. Net income for November	$?
d. Dividends	$?
e. Retained earnings, November 30, 20Y3	$?
f. Land	$?
g. Total assets	$?
h. Common stock	$?
i. Retained earnings	$?
j. Total stockholders' equity	$?
k. Total liabilities and stockholders' equity	$?
l. Cash received from customers	$?
m. Net cash flows from operating activities	$?
n. Net cash flows from financing activities	$?
o. Net cash flow and November 30, 20Y3 cash balance	$?

6. The financial statements at the end of Paradise Realty's first month of operations are shown below.

PARADISE REALTY Income Statement For the Month Ended November 30, 20Y3
Fees earned				$335,000
Operating expenses:
Wages expense		$ (a)
Rent expense		63,650
Supplies expense		54,103
Utilities expense		44,555
Miscellaneous expense		15,913
Total operating expenses				(255,271)
Net income				$ (b)

PARADISE REALTY Statement of Stockholders' Equity For the Month Ended November 30, 20Y3
	Common Stock	Retained Earnings	Total
Balances, Nov. 1, 20Y3		$0		$0			$0
Issuance of common stock		274,000					274,000
Net income				(c)			(c)
Dividends				(d)			(d)
Balances, Nov. 30, 20Y3		$274,000		$(e)			$327,699

PARADISE REALTY Balance Sheet November 30, 20Y3
Assets
Cash		$ 180,000
Supplies		73,039
Land		(f)
Total assets		$ (g)
Liabilities
Note payable		$ 145,340
Stockholders' Equity
Common stock	$ (h)
Retained earnings	(i)
Total stockholders' equity		(j)
Total liabilities and stockholders' equity		(k)

PARADISE REALTY Statement of Cash Flows For the Month Ended November 30, 20Y3
Cash flows from operating activities:
Cash received from customers	$ (l)
Deduct cash payments for expenses and payments to creditors	(182,970)
Net cash flows from operating activities		$ (m)
Cash flows used for investing activities:
Cash payments for acquisition of land		(220,000)
Cash flows from financing activities:
Cash received from issuing common stock	$ 274,000
Deduct dividends	(26,030)
Net cash flows from financing activities		(n)
Net increase in cash during month		(o)
Cash as of November 1		0
Cash as of November 30		(o)

Instructions:

1. Would you classify a realty business such as Paradise Realty as a manufacturing, merchandising, or service business?

Choose One:

manufacturing business

merchandising business

service business

2. By analyzing the interrelationships among the financial statements, determine the proper amounts for (a) through (o). Enter all amounts as positive numbers.

a. Wages expense	$?
b. Net income	$?
c. Net income for November	$?
d. Dividends	$?
e. Retained earnings, November 30, 20Y3	$?
f. Land	$?
g. Total assets	$?
h. Common stock	$?
i. Retained earnings	$?
j. Total stockholders' equity	$?
k. Total liabilities and stockholders' equity	$?
l. Cash received from customers	$?
m. Net cash flows from operating activities	$?
n. Net cash flows from financing activities	$?
o. Net cash flow and November 30, 20Y3 cash balance	$?

7.