Brief Exercises (b) Total liabilities decreased by 395,000 during the year. The company incurred a loss of $40,000. R. Butler made of the year? an additional investment of $ 100,000 and made no withdrawals. What is the amount of total assets at the end () Total assets increased by $45,000, and total liabilities decreased by $50,000. There were no additional owner's investments, and R. Butler withdrew $40,000. What is the amount of profit or loss for the year? BEL-11 Indicate whether each of the following items is an asset (A), liability (L), or part of owner's equity (OF). 1. Accounts receivable Id 2. Salaries payable 3. Equipment 4. Supplies 5. Owner's capital 6. Notes payable BEI-12 Presented below are eight business transactions. Indicate whether the transactions increased (+), D decreased (-), or had no effect (NE) on each element of the accounting equation. (a) Purchased $250 of supplies on account. (b) Performed $500 of services on account. (c) Paid $300 of operating expenses. (d) Paid $250 cash on account for the supplies purchased in item (a) above. (e) Invested $1,000 cash in the business. (f) Owner withdrew $400 cash. g) Hired an employee to start working the following month. (h) Received $500 from a customer who had been billed previously in item (b) above. (i) Purchased $450 of equipment in exchange for a note payable. Use the following format, in which the first one has been done for you as an example: Transaction Assets Liabilities Owner's Equity Capital + $250 Drawings + $250 Revenues Expenses NE NE NE NE BEI-13 Match the following basic transaction analysis with the best description of the economic event. 1. Cash increased by $9,000 and the owner's equity account, M. Vijayakumar, Capital, is increased by $9,000. 2. Cash is decreased by $6,000 and the asset account Prepaid Rent is increased. 3. Supplies is increased by $1,000 and the liability account Accounts Payable is increased by $1,000. 4. Accounts receivable is increased by $900 and the revenue account Service Revenue is increased by $900. Description Transaction Analysis (a) Cash paid in advance for rent. (b) Owner invests cash in the business. (c) Supplies are purchased on account. (d) Company provides service on account. BEI-14 Classify each of the following items as owner's investments (1), drawings (D), revenue (R), expenses (E), or as having no effect on owner's equity (NE): (a) Advertising expense (b) Commission fees earned (c) Cash received from the company's owner (d) Amounts paid to employees (e) Services performed on account Utilities incurred Cash distributed to company owner BEI-15 Presented below is information from the statements of owner's equity for Kerkan Consulting for the first three years of operation. Determine the missing amounts: 2015 2016 2017 $68,000 $ (c) J. Kerkan, capital, January 1 $ 0 50,000 0 20,000 Investment in the year (b) 17,000 Profit (loss) for the year 25,000 12,000 Drawings in the year (a) 33,000 (d) J. Kerkan, capital, December 31 68,000 65,000 wned and operated by Natasha Woods. In alphabetical order below are the finan ms, prepare an income statement for the mont(a) (b) All private enterprises must follow ASPE. ( C ) or ASPE. Companies are required to include a note in their financial statements stating if they are using IFRS (d) Using IFRS may help Canadian public companies attract investors from around the globe. BE1-6 Match each of the following terms with the best description below: 1. Historical cost 2. Revenue recognition 3. Going concern assumption 4. Reporting entity concept 5. Monetary unit concept (a) Transactions are recorded in terms of units of money. (b) Transactions are recorded based on the actual amount received or paid. ( C ) Indicates that personal and business record keeping should be kept separate, (d) Performance obligation has been satisfied. (e ) Businesses are expected to continue operating indefinitely. BE1-7 Match the following components with the best description below and indicate if the component in reported on the balance sheet (BS) or income statement (IS). 1. Assets 2. Liabilities 3. Owner's equity 4. Revenues 5. Expenses 6. Profit Description Component Balance Sheet or Income Statement (a) The increase in assets, or decrease in liabilities, resulting from business activities carried out to earn profit. (b) Resources controlled by a business that are expected to provide future economic benefits. (c) The owner's claim on the residual assets of the company. (d) Present obligations which are expected to result in an outflow of economic resources as a result of a past transaction. (e) The cost of resources consumed or services used in the company's business activities. in. BEI-8 Presented below is the accounting equation. Determine the missing amounts: Assets Liabilities + Owner's Equity $75,000 $24,000 (a) (b) $150,000 $91,000 $89,000 (c) $52,000 on. BEI-9 Use the accounting equation to answer each of the following questions: (a) The liabilities of Weber Company are $120,000 and the owner's equity is $232,000. What is the amount of Weber Company's total assets? (b) The total assets of King Company are $190,000 and its owner's equity is $91,000. What is the amount of its total liabilities? (c) The total assets of Smith Company are $800,000 and its liabilities are equal to one half of its total assets. What on is the amount of Smith Company's owner's equity? os also rough BE1-10 Butler Company is owned by Rachel Butler. The company had total assets of $850,000 and total liabili ties of $550,000 at the beginning of the year. Answer each of the following independent questions: solution (a) During the year, total assets increased by $130,000 and total liabilities decreased by $80,000. What is the ions amount of owner's equity at the end of the year