3 If total assets increase by $12,000 and total liabilities decrease by $7,000 d

Question

3 If total assets increase by $12,000 and total liabilities decrease by $7,000 during a period, what is the change in stock holders equity? 6 If total liabilities increase by $10,000 and total stockholders equity increase by $5,000, what is the change in total assets? If stockholders equity increases by $10,000 and total liabilities decrease by $10,000, what is the change in total assets? 9 10 12 If a company has revenue of $122,500, expenses of $100,000 an dividends of $12,500, net income (loss) is 13 On January 1st a company off of $300,000. After several counter offers, the sellor accepts an offer of $260,000. 15 16 The county assessor values building at $100.000. As of October 31st the company is offered $300,000 for the building What value should 17 What is the journal entry if the company paid cash? 18 19 20 21 If the cash balance at the beginning of the month is $22,000, cash payment for the month wrere $10,000 and the ending cash balance was $40,000, what are the cash receipts? Vocab JEs Applying Concepts 4M

Explanation / Answer

1. If Total Assets increases and Total Liabilities Decreases then the Stock holders' Equity will increase

Change in Stock Holders' Equity = Increase in Assets + Decrease in Liabilities

Change in Stock Holders' Equity = 12000 + 7000 = $19000

2. If Total Liabilities increases and Stock holders' Equity increases then Total Assets Increases

Change in Total Assets = Increase in Liabilities + Increase in Stock holders' Equity

Change in Total Assets = 10000 + 5000 = $15000

3. If Total Liabilities decreases and Stock holders' Equity increases then Total Assets Increases/decreases by net effect

Change in Total Assets = increase in Equity - decrease in liability

Change in Total Assets = 10000 - 10000 = $0

4. Computation of Net Income

Net Income = Revenue - Expenses - Dividend

Net Income = 122500 - 100000 - 12500

Net Income = $10000

5. The building is recorded at the cost value irrespective of what outside assessors valued.

Journal Entry

Debit Building $260000

Credit Cash 260000

6. Cash Receipts = Ending Cash Balance + Cash Payments - Opening Cash Balance

Cash Receipts = 40000 + 10000 - 22000

Cash Receipts = $28000

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