hapter 1 Homework Help Save 3 Jones Enterprises was started when it acquired $7,

Question

hapter 1 Homework Help Save 3 Jones Enterprises was started when it acquired $7,200 cash from creditors and $8,800 from owners. The company immediately purchased land that cost $11,000 a. Record the events under an accounting equation. b. Ater all events have been recorded, Jones's obligations to creditors represent what percent of total assets? c. After all events have been recorded, Jones's stockholders' equity represents what percentage of total assets? d. Assume the debt is due. Gilven that Jones has $8,800 in stockholders' equity, can the company repay the creditors at this point? Complete this question by entering your answers in the tabs below Req A Req 8 to D Record the events under an accounting equatio-center any decreases to account balances with a mind sign,) Accounting Equation Cash Land Creditors C Prex 3 of 12 Next> MacBook Air 3 6 9 W E command op

Explanation / Answer

3)

a)

2)Total asset =5000+11000= 16000

% of obligation to total asset = Liabilities /total asset

                        = 7200/16000

                        = .45 or45%

c)% of equity = 8800/16000

         = .55 or 55%

d)cash available is $ 5000 which means only part of creditors can be paid out of $7200 or otherwise company has to sell.

4)Net income =Increase in equity - issue of stock+dividend paid

             = 42500-10700+9500

              = 41300

Accounting Equation cash + Land = creditors + equity 5000 11000 7200 8800 Balance 5000 11000 7200 8800

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