ments 25 LO2 The Accounting Equation SES. Use the accounting equation to answer each question that follows. 1. At the beginning of the year, Palette Company's assets were $90,000, and its own- er's equity was $50,000. During the year, assets increased by $30,000 and liabilities increased by $5,000. What was the owner's equity at the end of the year? 2. At the beginning of the year, Carmines Company had liabilities of s100,000 and owner's equity of $96,000. If assets increased by $40,000 and liabilities decreased by $30,000, what was the owner's equity at the end of the year? L02 The Accounting Equation and Net Income SE6. Vivaldi Company had assets of $280,000 and liabilities of $120,000 at the begin- ning of the year, and assets of $400,000 and liabilities of $140,000 at the end of the year. During the year, the owner invested an additional $40,000 in the business, and the company made withdrawals of $48,000. What amount of net income did the company earn during the year? Preparation and Completion of a Balance Sheet in proper order for Manteno Company at June 30, 2014, using Exhibit 8 as a model: LO3 SE7. Use the following accounts and balances to prepare a balance sheet with the accounts 3,200 Building 1,400 57,400 544,000 Accounts Receivable Wages Payable Owner's Capital Cash Preparation of Financial Statements SE8. Randall Company engaged in activities during the first year of its operations that resulted in the following: service revenue, $4,800; expenses, $2,450; and withdrawals, $410. In addition, the year-end balances of selected accounts were as follows: Cash, $1,890; Other Assets, $1,000; Accounts Payable, $450; and Owner's Capital, $2,440. Prepare Randall's income statement, statement of owner's equity, and balance sheet (assume the year ends on December 31,2014). (Hint: You must solve for the beginning balance of Owner's Equity for 2014.) LO3 Accounting and Business Enterprises SE9. Match the terms that follow with the appropriate definitions. Los d. The process of generating and commu- 1. Accounting 2. Profitability 3. Liquidity 4. Financing activities 5. Investing activities 6. Operating activities 7. Financial accounting 8. Managerial accounting 9. Ethics 10. Fraudulent financial reporting nicating accounting information in the form of financial statements to decision makers outside the organization e. Activities of management engaged to spend capital in ways that are productive and will help a business achieve its objectives f. The ability to earn enough income to attract and hold investment capital g. An information system that measures, a. The process of producing accounting processes, and communicates financial information for the internal use of a company's management information about an identifiable economic entity