Accounting Equation Todd Olson is the owner and operator of Alpha, a motivationa

Question

Accounting Equation

Todd Olson is the owner and operator of Alpha, a motivational consulting business. At the end of its accounting period, December 31, 2013, Alpha has assets of $622,800 and liabilities of $196,800. Using the accounting equation and considering each case independently, determine the following amounts.

a. Todd Olson, capital, as of December 31, 2013. $ b. Todd Olson, capital, as of December 31, 2014, assuming that assets increased by $98,400 and liabilities increased
by $59,170 during 2014. $ c. Todd Olson, capital, as of December 31, 2014, assuming that assets decreased by $49,200 and liabilities increased
by $17,440 during 2014. $ d. Todd Olson, capital, as of December 31, 2014, assuming that assets increased by $82,210 and liabilities decreased
by $31,140 during 2014. $ e. Net income (or net loss) during 2014, assuming that as of December 31, 2014, assets were $784,730,
liabilities were $127,670, and there were no additional investments or withdrawals.

Explanation / Answer

Assets= Owner's Capital+Retained Earning Liabilities a. 622800= Capital+196800 Capital= 622800-196800 Capital= 426000 b. 721200 Capital+255970 Capital= 721200-255970 Capital= 465230 c. 573600 Capital+ 214240 Capital= 573600-214240 Capital= 359360 d. 705010 Capital+Retained Earning/Net Income 165660 Capital= 705010-165660 Capital= 539350 e. 784730 426000+Retained Earning/Net Income+ 127670 Net Income= 784730-426000-127670 Net Income= 231060

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