Question
Information for problems #1-5. The following table summarizes balance sheet and income statement data for the year 2013 for two sole proprietor farmers: Mr. Smith
Information for problems #1-5.
The following table summarizes balance sheet and income statement data for the year 2013 for two sole proprietor farmers: Mr. Smith and Mr. Jones. Some items have been omitted, and you have to determine them.
|
| Mr. Smith | Mr. Jones |
| Beginning of year: |
|
|
| Total assets.. | $90,000 | $107,000 |
| Total liabilities | $70,000 | (c) |
| Total owners equity | (a) | $90,000 |
| End of year: |
|
|
| Total assets.. | $180,000 | $171,000 |
| Total liabilities. | $145,000 | $44,000 |
| Total owners equity.... | $35,000 | $127,000 |
| Changes in owners equity during the year: |
|
|
| Additional investment. | (b) | $35,000 |
| Drawings.. | $35,000 | (d) |
| Total revenues..... | $225,000 | $125,000 |
| Total expenses. | $178,000 | $88,000 |
1. The basic accounting equation is Owner Equity = Assets Liabilities.
a. True
b. False
2. What was Mr. Smiths beginning-of-the-year owners equity?
a. $ 20,000
b. $ 70,000
c. $ 90,000
d. $110,000
e. $160,000
3. What was Mr. Smiths additional investment?
a. $ 3,000
b. $ 12,000
c. $ 15,000
d. $ 32,000
e. $ 90,000
4. What were Mr. Jones beginning-of-the-year total liabilities?
a. $ 17,000
b. $ 90,000
c. $107,000
d. $124,000
e. $197,000
5. What were Mr. Jones drawings?
a. $ 35,000
b. $ 37,000
c. $ 72,000
d. $109,000
e. $199,000
Information for problems #6-12.
Farmer C. Taylor has compiled the following financial information as of December 31, 2013. Please answer the questions below.
| Accounts receivable | $ 2,000 |
| Inventoryfeeder livestock. | $ 52,000 |
| Checking account....... | 2,250 |
| Notes payablemach. & equip.... | 65,000 |
| Cash on hand... | 5,500 |
| Machinery & equipment..... | 70,000 |
| Inventorysupplies. | 3,750 |
| Retained earnings... | 133,500 |
| Accounts payable....... | 15,000 |
| Real estate debt.. | 130,000 |
| Income taxes payable... | 12,000 |
| Contributed capital. | 150,000 |
| Buildings. | 30,000 |
| Farmland. | 300,000 |
| Inventorycrops...... | 40,000 |
|
|
|
Note: There are no checks in transit for the farm business.
6. What is the value of Taylors total assets?
a. $105,500
b. $400,000
c. $503,250
d. $503,500
e. $505,500
7. What is the value of Taylors total liabilities?
a. $ 27,000
b. $195,000
c. $222,000
d. $384,000
e. $399,000
8. What is the value of Taylors total owners equity?
a. $150,000
b. $222,000
c. $283,500
d. $400,000
e. $505,500
9. What is the value of Taylors total current liabilities?
a. $ 15,000
b. $ 27,000
c. $ 92,000
d. $222,000
e. $505,500
10. What is the value of Taylors total current assets?
a. $ 7,500
b. $ 9,750
c. $105,500
d. $175,500
e. $205,500
11. What is the value of Taylors total noncurrent liabilities?
a. $195,000
b. $207,000
c. $222,000
d. $355,500
e. $372,000
12 What is the value of Taylors total noncurrent assets?
a. $400,000
b. $452,000
c. $492,500
d. $495,750
e. $505,500
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