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Brief Exercises Chapter 1 - Solutions

The document provides solutions to brief exercises related to accounting principles. It includes solutions to 11 brief exercises involving calculating account balances and identifying types of accounts. The exercises cover the basic accounting equation and how to calculate assets, liabilities, and owner's equity. They also involve identifying increases, decreases, and types of accounts.

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95 views

Brief Exercises Chapter 1 - Solutions

The document provides solutions to brief exercises related to accounting principles. It includes solutions to 11 brief exercises involving calculating account balances and identifying types of accounts. The exercises cover the basic accounting equation and how to calculate assets, liabilities, and owner's equity. They also involve identifying increases, decreases, and types of accounts.

Uploaded by

31231020764
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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SOLUTIONS TO BRIEF EXERCISES

BRIEF EXERCISE 1.1

(a) $90,000 – $50,000 = $40,000 (Owner’s Equity).


($90,000 - $50,000 = $40,000)
(Assets – Liabl. = Owner’s equity)

(b) $44,000 + $70,000 = $114,000 (Assets).


($44,000 + $70,000 = $114,000)
(Liabl. + Owner’s equity = Assets)

(c) $94,000 – $53,000 = $41,000 (Liabilities).


($94,000 - $53,000 = $41,000)
(Assets – Owner’s equity = Liabl.)
LO3 BT: AP Difficulty: Easy TOT: 3 min. AACSB: Analytic AICPA FC: Reporting

BRIEF EXERCISE 1.2

(a) $120,000 + $230,000 = $350,000 (Total assets).


($120,000 + $230,000 = $350,000)
(Liabl. + Owner’s equity = Assets)

(b) $190,000 – $89,000 = $101,000 (Total liabilities).


($190,000 - $89,000 = $101,000)
(Assets – Owner’s equity = Liabl.)

(c) $900,000 – 0.5($900,000) = $450,000 (Owner’s equity).


[$900,000 – ($900,000 x .5) = $450,000]
[Assets – (Assets x .5) = Owner’s equity]
LO3 BT: AP Difficulty: Easy TOT: 3 min. AACSB: Analytic AICPA FC: Reporting

BRIEF EXERCISE 1.3

(a) ($800,000 + $150,000) – ($300,000 – $60,000) = $710,000


(Owner’s equity).
[($800,000 + $150,000) – ($300,000 - $60,000) = $710,000]
[(Beg. assets + Incr. in assets) – (Beg. liabl. – Decr. in liabl) = End. owner’s equity]

(b) ($300,000 + $100,000) + ($800,000 – $300,000 – $70,000) =


$830,000
(Assets).
[($300,000 + $100,000) + ($800,000 - $300,000 - $70,000) = $830,000]
[(Beg. liabl. + Incr. in liabl.) + (Beg. assets – Beg. liabl. – Decr. in owner’s equity) = End. assets]
(c) ($800,000 – $80,000) – ($800,000 – $300,000 + $120,000) =
$100,000
(Liabilities).
[($800,000 - $80,000) – ($800,000 - $300,000 + $120,000) = $100,000]
[(Beg. assets – Decr. in assets) – (Beg. assets – Beg. liabl. + Incr. in owner’s equity) = End. liabl.]
LO3 BT: AP Difficulty: Moderate TOT: 4 min. AACSB: Analytic AICPA FC: Reporting
BRIEF EXERCISE 1.4

Owner’s Equity
Owner’s Owner’s
Assets = Liabilities + Capital – Drawing + Revenue – Expense
s s s

(a) X = $90,000 + $150,000 – $40,000 + $450,000 – $340,000


X = $90,000 + $220,000
X = $310,000

(Assets = $90,000 + $150,000 - $40,000 + $450,000 - $340,000)


(Assets = Liabl. + Owner’s cap. – Owner’s draw. + Rev. – Exp.)
(b) $57,000 = X + $35,000 – $7,000 + $52,000 – $35,000
$57,000 = X + $45,000
X = $12,000
($57,000 = Liabl. + $35,000 - $7,000 + $52,000 - $35,000)
(Assets = Liabl. + Owner’s cap. – Owner’s draw. + Rev. – Exp.)
(c) $660,00 = ($660,000 x + X (Owner’s equity)
0 2/3)
$660,00 = $440,000 + X
0
X = $220,000
[$660,000 = ($660,000 x 2/3) + Owner’s equity]
[Assets = (Assets x 2/3) + Owner’s equity]
LO3 BT: AP Difficulty: Moderate TOT: 5 min. AACSB: Analytic AICPA FC: Reporting

BRIEF EXERCISE 1.5

A (a) Accounts receivable A (d) Supplies


L (b) Salaries and wages payable OE (e) Owner’s capital
A (c) Equipment L (f) Notes payable
LO3 BT: C Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Reporting

BRIEF EXERCISE 1.6

E (a) Advertising expense D (e) Owner’s


drawings
R (b) Service revenue R (f) Rent revenue
E (c) Insurance expense E (g) Utilities expense
E (d) Salaries and wages expense
LO3 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Reporting
BRIEF EXERCISE 1.7

Assets Liabilities Owner’s Equity


(a) + + NE
(b) + NE +
(c) – NE –
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Reporting

BRIEF EXERCISE 1.8

Assets Liabilities Owner’s Equity


(a) + NE +
(b) – NE –
(c) NE* NE NE
*Cash increased and Accounts Receivable decreased; total Assets were unchanged.
LO4 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Reporting

BRIEF EXERCISE 1.9

R (a) Received cash for services performed.


NOE (b) Paid cash to purchase equipment.
E (c) Paid employee salaries.
LO4 BT: C Difficulty: Easy TOT: 1 min. AACSB: None AICPA FC: Reporting
BRIEF EXERCISE 1.10

SMYTH COMPANY
Balance Sheet
December 31, 2022

Assets
Cash.................................................................................................
49,000
Accounts receivable.......................................................................
62,500
Total assets.............................................................................
$111,500

Liabilities and Owner’s Equity


Liabilities
Accounts payable...................................................................
90,000
Owner’s equity
Owner’s capital.......................................................................
21,500
Total liabilities and owner’s equity................................
$111,500
[($49,000 + $62,500) = $90,000 + $21,500]
[(Cash + Accts. rec.) = Accts. pay. + Owner’s cap.]
LO5 BT: AP Difficulty: Easy TOT: 4 min. AACSB: Analytic AICPA FC: Reporting

BRIEF EXERCISE 1.11

BS (a) Notes payable


IS (b) Advertising expense
OE, BS (c) Owner’s capital
BS (d) Cash
IS (e) Service revenue
LO5 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Reporting

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